Legislative Assembly of Ontario

The House met at 2 p.m.

Prayers.

Hon. Mr. Auld: Mr. Speaker, I have a statement to make, but unfortunately I don’t have sufficient copies because it was not completed. If I may, I will wait until tomorrow, when I can do it properly.

ORAL QUESTIONS

TEACHER-BOARD NEGOTIATIONS

Mr. S. Smith: If I asked where is everybody, would that count as my first question, Mr. Speaker?

I will ask a question of the Minister of Education. Given we are now in the 26th school day of the strike in the Brant elementary schools and are continuing with the very divisive and bitter work-to-rule situation in North York; given that in Brant the teachers want arbitration but the board doesn’t and in North York the board wants arbitration but the teachers don’t; how long will it take before the minister realizes compulsory arbitration of a fair and reasonable kind is the proper way to settle disputes in the educational system and that this business of each side stubbornly clinging to its own demands and refusing to have a referee come in to take over the matter is a poor example to our children -- especially in these days when we are asking the children to be better disciplined, yet we have the boards and the teachers refusing to do anything other than use their ultimate weapons in their negotiation of salary disputes?

Hon. Miss Stephenson: Mr. Speaker, I would heartily agree with the Leader of the Opposition that arbitration is an appropriate alternative, in some situations, in resolving labour-management disputes and that it’s one which should be considered seriously in the course of any set of negotiations.

The Leader of the Opposition is asking that at this point, in peremptory fashion, without considering the views of all those involved in the labour-management negotiation situation within the school system of Ontario -- and I refer to representatives of boards of trustees, representatives of the teachers, representatives of parents’ groups with a very direct concern, and representatives of students -- without these groups being given any opportunity to place before the external review committee their concerns about the appropriate mechanisms and sanctions which should be introduced in the context of the negotiations between teachers and school boards, that I act in a unilateral fashion, which I believe at this point to be quite inappropriate.

I would ask the Leader of the Opposition to develop his thesis in the best possible form to present as rapidly as possible to the chairman of the committee which is reviewing Bill 100 so it can be considered by that committee, which will be reporting to me in the very early spring of 1980. If at that time there are strong recommendations by that committee that major changes should be made to the bill, particularly changes related to the sanctions available under the act -- sanctions which I would remind the members of this House were supported by all three parties and were introduced by the then leader of the official opposition --

Mr. Nixon: That’s not correct.

Hon. Miss Stephenson: Well, certainly the support was there for it at that time, and it was initiated in that part of the House. I do believe the democratic process must and should be permitted to take place in the review of this bill; I would ask the Leader of the Opposition to consider that action seriously.

Mr. S. Smith: By way of supplementary -- and I may say I sincerely am pleased the minister is over her laryngitis -- I would ask the minister if she’s really being serious. Surely she understands this House is the appropriate place for the opposition to put forward suggestions, and given virtually everyone in Ontario who is politically aware recognizes the minister is at some point going to adopt our position, just as her parliamentary assistant already has, why doesn’t the minister do so now rather than wait for the excuse of her so-called external review, or wait for an election campaign before she takes our position? Why doesn’t she do what everybody knows she is going to do ultimately; that is take our position now, introduce a form of reasonable, professional, permanent arbitration and get these matters settled rather than dragging them out for political purposes?

Hon. Miss Stephenson: I am persuaded from time to time that the Leader of the Opposition did relatively well in his other existence, although there are times when I would have some difficulty in being sure just what to expect as a result of the initial statement made by him. I am not quite sure of the meaning when he congratulates me on regaining my voice; there may be some ulterior motive there.

I would have to remind the Leader of the Opposition he is not a very good prognosticator either, and to tell this House I am going to adopt his position -- which I would remind the House was indeed final offer selection -- at the end of the external review committee’s activities, I believe is using a crystal ball which is either veiled in some peculiar shades or is so totally cloudy he hasn’t any idea what is going on.

Mr. Cassidy: Mr Speaker, would the minister not agree that a major reason there are problems in the working of Bill 100 right now is the chronic underfunding of education there has been across the province over the past few years by this government, the fact that the provincial share of education costs have fallen from 61 per cent to 51 per cent over the course of the last few years, and the fact that despite the minister having had the report from the Jackson commission on declining enrolment on her desk over the course of the last year, there has been no action by this government in implementing the recommendations of that report?

Hon. Miss Stephenson: Mr. Speaker, the answer to the first question is no; but I would remind the leader of the third party that we have already implemented some of the recommendations of the Jackson commission, and indeed we did implement them before the final report of the commission was delivered to my desk, which I would remind the honourable member was February of last year.

Mr. Speaker, we have been looking at all of the responses to the Jackson report and the honourable member knows that we will be bringing forward a comprehensive statement on education within this province in the very near future; however, I would like to remind the honourable member that if he were to take into account all of the funding which is provided by the provincial government on behalf of education in this province, the total percentage of the provincial contribution is closer to 58 per cent than 51 per cent, and the total decline is not nearly so massive as the leader of the third party would like people to believe.

Mr. Nixon: If the minister cannot report to the House anything from the Education Relations Commission that would indicate an approach to an agreement in the Brant/Brantford situation, is she now prepared to recommend to her colleagues and to the House that we take action in this House to end the strike, certainly before we think of an adjournment during the next week or two?

Hon. Miss Stephenson: Mr. Speaker, I can report to this House that the Education Relations Commission, as the honourable member knows, was actively involved in Brant over the weekend with some progress, although not sufficient progress. There is, I am afraid, at this point a considerable amount of games playing within the Brant situation. I think that must be made public, because it seems to me the children in that area are being jeopardized by the kind of example which is being set in that area, although in fact I have no report that their educational program has been jeopardized at this point.

Mr. Speaker, there is in addition a report from the Education Relations Commission that negotiations took place over the weekend in North York as well. They were not particularly productive, but I can report to the House that at the request of the North York Board of Education I will be meeting with them this afternoon. I do not know the purpose of their request for the meeting, except that they did suggest there was an impasse and they wished to have a discussion with me about that.

Mr. Makarchuk: Supplementary: Given the fact that both sides are adamant and refuse to move at this time, and the fact that this Legislature will cease to function about December 20 and will not resume until about the end of February or March, what does the minister see or foresee as available options, or what actions does she intend to take to prevent any harm in the educational process of the children in Brant due to the fact that possibly nothing will be done for the next two months?

Hon. Miss Stephenson: Mr. Speaker, I am not nearly so pessimistic as the member for Brantford obviously is. It is my understanding that the Education Relations Commission is still carefully and closely monitoring the educational program for the children in Brant; it is also my understanding that they are keeping a very close eye on what is happening; but there can be no solution to that problem unless the two parties to the negotiation decide they are going to change the attitudes which have been prevalent up until this time. It is my sincere hope they will begin to behave in a responsible way related to the children of that community in order to ensure that the very few items still in dispute are negotiated rationally by the two parties within the next two days. If that were to happen, there would be a solution immediately.

[2:15]

NATURAL GAS CONVERSION

Mr. S. Smith: Mr. Speaker, I have a question of the Minister of Energy, if I might have his attention. Given the fact the main reasons for the backlog in conversions to natural gas from oil have to do with manpower and to some extent with weather problems, what has the government of Ontario done to get rid of that backlog, to anticipate the problem and to provide the extra manpower which might be necessary so that this fall could have been used more intelligently to get people converted to natural gas, since the government of Ontario has known for years that natural gas would be plentiful while oil would ultimately be in short supply?

Hon. Mr. Welch: Mr. Speaker, in reporting to the standing general government committee on this subject matter we did share some facts and figures with respect to the tremendous increase in conversions being undertaken by the distributors. It was my understanding, in consulting with them to acquire that information, that they were proceeding to the extent of the resources that were available. There are not just the limitations imposed by manpower but rather by a shortage of some equipment, for example burners which they did not have available.

Mr. S. Smith: Supplementary: Is the minister not aware, as anybody could be by doing what we have done and getting in touch with the two main companies, that the main reasons for the backlog have to do with a lack of manpower and with weather problems? The burners and furnaces were a small matter; they could handle those, but they’ve lacked the manpower to get out there and do the job. Why didn’t the minister, over the late summer and throughout the fall, work with those companies to give them the manpower they need? We have enough unemployed people in Ontario thanks to the previous efforts of his government. Why didn’t we work with the companies to put those people to work so these conversions could occur?

In particular, would the minister like to comment on what he’s done with the companies regarding the matter of Pine Valley Farms in Norval, which has a large greenhouse and wants a gas pipeline? The farm is within 800 feet of a Union Gas line and three miles from a Consumers Gas line, and yet Consumers Gas has a monopoly so the farm is still unable to get the natural gas which could have enabled them to save on other fuel. What is he doing about that?

Hon. Mr. Welch: Mr. Speaker, I’m not familiar with the problem which the honourable Leader of the Opposition raises in the latter part of his question, but obviously I’d be glad to get information to follow up on that particular question.

Certainly, if labour is the only problem being experienced by the distributors in order to step up the conversion, I’m sure they would have programs and resources and access to the labour market in order to step that up. I say to the House quite honestly that in seeking information from the distributors I was told that one of the main problems was the fact that the supplier of some of the equipment that was required was falling behind in his orders, notwithstanding how many more men they might have.

Mr. Cassidy: Does the government have a plan and projection for the rate of conversion from fuel oil heating to natural gas heating over the course of the 1980s? Has the government communicated that plan to the natural gas distributors across the province to see whether it’s feasible; and have this minister and the Ministry of Industry and Tourism (Mr. Grossman) and other ministers, as needed, sat down to establish where there may be bottlenecks in reaching that target and taken action to ensure those bottlenecks can be ironed out so that the rate of conversion can be achieved?

Hon. Mr. Welch: I think that’s a reasonable question. The discussions have been going on for some time. I think a lot of people, including ourselves, are waiting for some of the final details with respect to the gas incentive program to see what resources might be available. It is my understanding that companies will then be attaching certain priorities with respect to the program, particularly as they relate to the results of extensions.

In the meantime, if the companies are doing the reasonable thing they are working in the densely-populated areas to attempt as quickly as possible to respond to the tremendous number of requests there are now for this conversion in the large centres.

Mr. J. Reed: Does the minister recall that when we discussed this matter during estimates of the Ministry of Energy that one of the bottlenecks to increasing the gas infrastructure was identified as the artificial line that was set up giving one gas company a monopoly in one area and another one a monopoly in the other area? I’m sure the minister must recall that. In the light of the very specific mention by my leader, what action has he taken in matters of this kind, where relative to this specific situation the conversion from oil to natural gas would save about 75,000 gallons of heating oil in this next winter?

Hon. Mr. Welch: Is the member referring to the latter part of the Leader of the Opposition’s question with respect to Pine Valley Farms?

Mr. J. Reed: Yes.

Hon. Mr. Welch: I indicated when I gave my answer that I would get some further information on that.

AUTO INDUSTRY LAYOFFS

Mr. Cassidy: I have a question of the Minister of Industry and Tourism about the layoffs which have now put one quarter of the workers in Ontario’s major industry out of work; that is, in the auto industry.

In view of the fact there are 13,000 workers on indefinite layoff and next week there will be 14,000 workers on temporary layoff in the automobile industry, can the minister undertake to call together all of the major companies in the auto industry and in the parts manufacturing industry, as well as the leadership of the automobile workers, in order to bring together plans to resolve the crisis in the industry and get people back to work in Ontario in the auto trade?

Hon. Mr. Grossman: Over the past few months I have met with all the persons of whom the leader of the third party talks.

Although the meeting with the United Auto Workers concentrated on the Chrysler situation, we did take advantage of that very constructive conversation we had in that lengthy meeting to discuss the automotive industry generally. It seemed to me at that time that all of the major automobile manufacturers, the UAW and all of the parts people to whom we have spoken, and we have spoken to all of the large parts firms, agreed with regard to the essential problems we are now facing, which mainly centre around the massive changes the industry is undergoing, as well as the problems in terms of markets.

The market for the automobiles being put out here and in the United States is very bad; it’s very slow for the automobiles being made here. The plain fact of the matter is that little will be accomplished in terms of putting those people back to work in the short term through all of us in the province being called together again to simply repeat everything we’ve all agreed upon over the last several months.

Let me deal with one more item in the short term: I should remind the leader of the third party that in the short term the layoffs in this country, on a percentage basis, are substantially less than the layoffs occurring in the United States.

Mr. Laughren: Our sales are up, too.

Hon. Mr. Grossman: That is absolutely true, and the member’s leader acknowledged that was true. The member for Nickel Belt should turn around before he interjects.

The layoffs here are proportionately less than in the United States. We aren’t getting too badly treated in that sense.

It is a critical situation and we’re most concerned about it. The only point I raise for the leader of the third party is that these solutions take a lot of money and take a period of time to solve. They will be solved, I am confident. I think all of the people with whom we have met, including the UAW, are fairly confident that in the longer term, that is over the next three or four years, they will be solved. I think most analysts of the industry see that after this current year there should be a lot of those people who are currently laid off going back to work.

It’s a critical situation; we’re not happy with it; but I say to the leader of the third party I think we’ve done literally everything we can do as a province at this time to deal with that situation.

Mr. Cassidy: Supplementary: Before the Legislature is drowned in the tears being shed by the minister over the critical state of the industry, is the minister not aware that when we were out to see General Motors just a week or so ago for example, we found that company has no plans to bring into Canada, or into Ontario, the small cars which are the wave of the future in terms of providing jobs in the automobile industry in North America?

What action is the government intending to take under the auto pact in order to ensure we are making the cars that will be selling in the future, rather than being landed with white elephants, cars that are too large and consume too much gasoline to be effective contenders in the North American marketplace over the 1980s?

Hon. Mr. Grossman: The leader of the third party wants to give the impression General Motors is not giving us any share of the action on the new, lighter, fuel-efficient vehicles. The member knows that’s not accurate. The member is well aware of the almost $2 billion in commitments General Motors made a couple of weeks ago, which would involve putting a great deal of money into their Windsor plant to begin to assemble the front-wheel drive transmissions that otherwise the member and others would have expected might not have come into Ontario.

The member also knows they just committed money, in both Windsor and St. Catharines, to begin to make lighter, more fuel-efficient engines which will enable them to supply their new X-bodied cars, so that Ontario will have a large portion of the new X-bodied cars, their new car of the future as it were.

Look at the press release; it’s right there. Two billion dollars directly pointed towards those new cars; these units can’t be used in other cars.

The second point is Ford was in the same situation a year and a half ago. The member knows we were there and he knows we made sure they switched to the new V-6 light engines, thanks to the contribution made by the government -- the taxpayers of this province, more accurately -- in order to ensure we had our fair share of the new jobs provided through Ford’s new vehicles.

I’ve also dealt in this House with the situation at Chrysler, where while other governments are talking about putting in bridge financing and bank guarantees, I’ve made it clear as far as the government of Ontario is concerned any financial contribution, be it grant, loan-guarantee or whatever, must be contingent upon Chrysler doing what Ford and GM have done, and that is to put components, plants, factories and employment in this province related solely to the cars to be sold in the next 10 or 20 years -- the new technology, the lighter, fuel-efficient vehicles.

These are the things that caused the changeover from the current heavy, larger vehicles being made here to the lighter, fuel-efficient vehicles, not only mandated by American legislation but required by American consumers.

Mr. Laughren: Supplementary: Is the Treasurer -- the Minister of Industry and Tourism, rather; a slip there.

Mr. Martel: A Freudian slip.

Mr. Laughren: I refer to the minister’s ambitions that way.

Is the Minister of Industry and Tourism telling us he is satisfied with the announced investment plans of the Big Three as they apply to Ontario? Further, how can the minister talk about the need for time to resolve the problem? In the 1978 report done by the then Ministry of Treasury, Economics and Intergovernmental Affairs, the problems expressed in that report were the same as the problems we’re facing today; as a matter of fact they’re probably worse today because of the down-sizing changes taking place. When is the minister going to get off the sidelines and into the game and tell the Big Three we’re not happy with what is going on, and that their investment plans are inadequate for the future of jobs in Ontario?

Hon. Mr. Grossman: To the leader of the third party -- sorry, Freudian slip. May I say, as I have said earlier -- he wishes he had Stephen Lewis’s job, not his -- may I say to the member for Nickel Belt, as I have said here earlier, we have quite seriously told the Big Three we are not satisfied with the current level of investment here. We’re terribly dissatisfied with what has now become a serious and perhaps even chronic trade deficit on the auto side and we have to have some things done which will help correct that.

By way of taking concrete action further on the auto parts side, the Premier (Mr. Davis), the Treasurer (Mr. F. S. Miller) and I met last April with the multinational firms and delivered that exact message. We spent a great deal of time talking about research and development and the need to make sure the Canadian subsidiaries get their fair share of the new technology in that area. As a result, we have had one of the big eight in the auto parts side build a new plant here. I’ve got another coming in to see me and I’m rather optimistic that will result in some more new auto parts activity, involving new technology, in this province.

[2:30]

So I must say to the member for Nickel Belt that I can’t accept the analogy that we’re sitting on the sidelines. It would be hard for him to find an example of a government that has been meeting with all the players involved more often, more regularly and more aggressively in terms of asking, demanding and trying to arrange for the kinds of things we need in this province.

I should remind the member for Nickel Belt that in some cases when we meet with them we find that investments that might otherwise be coming here might locate in one of the southern United States, and in those instances I’m happy to be in a position in which I can say to them, notwithstanding the opposition parties in this province, that we are prepared to offer the incentive grants to get those automotive jobs in our province.

PILKINGTON GLASS LAYOFFS

Mr. Cassidy: Bearing in mind these frequent meetings the minister has talked about have led us to a situation where the auto trade deficit this year will be the worst in Canada’s history, I do want to ask him another question about a specific layoff in Scarborough at the Pilkington Glass Limited plant which makes auto glass. Has the minister met with Pilkington Glass Limited to talk about their problems and talk about that company’s situation? What action does the government intend to take to protect the jobs of the 450 workers in that automobile glass plant, who now find their jobs have been eliminated because of a decision of a multinational corporation which has no other automobile glass production in North America?

Hon. Mr. Grossman: The company met with officials from both my ministry and the Ministry of Labour. We have had meetings to discuss the situation. It is clear, I must say, that this is not one of those instances in which I can hold out much hope, as a result of those meetings, for the company being able to reconsider its decision.

I know the member wants to phrase it in the context of the firm being a multinational to give the full picture. He knows they had a severe loss of business. He knows they lost $14 million or $16 million in the past six or seven months. He knows the company attributes that loss of business to the fact that the firm was on strike for about six months, causing them to reconsider certain investment decisions they say they were about to take.

It is not my job, nor the job of this government, to take responsibility for the decision of that firm, be it multinational or Canadian. It is not my responsibility to comment upon whether that firm’s decision might have been different had the union not chosen to strike the plant over the past six or seven months. The member may draw his conclusions and others may draw theirs. The fact is the company has lost $14 million or $16 million in Canada this year and it has decided that it must reassess its position. It has found it has lost certain markets to its two major competitors during the time the plant was on strike, and therefore has reached certain decisions which we cannot alter.

The Ministry of Labour is working with the firm to ensure that they meet all of the current labour laws in force in this province and meet their obligations under the existing union agreement.

Mr. Cassidy: Supplementary: Given the fact that in 10 months we have chalked up a $2.5 billion deficit in our automobile trade with the United States, I assume the minister agrees that we should be producing more rather than fewer components and parts for automobiles in Canada. I would, therefore, like to ask the minister, since there are no other corporations producing auto glass in Canada, what plans does the government have to ensure the auto glass that goes into cars produced in Canada is in future made in Canada and is not imported into this country, with the permanent loss of 450 jobs?

Hon. Mr. Grossman: May I say I believe that some of the business that was being done by Pilkington Glass Limited out of Scarborough has gone to PPG Industries Canada Limited in Owen Sound, the fine town of Owen Sound.

Mr. Cassidy: No.

Hon. Mr. Grossman: The member says no. I must tell him that as a result of our meetings with the firm they have acknowledged that their share of the automotive glass market has gone to Canadian Pittsburgh Industries Division in the fine town of Owen Sound. If that information which we have received and checked out is true, then our automotive parts deficit will not be affected by this particular closedown.

Mr. R. F. Johnston: I would like to direct a supplementary question to the Minister of Labour, if I can, because he has been involved in this process. Is he willing to conduct a full investigation of the labour practices of Pilkington Glass Limited, given that the company shut down the SC2 tank on September 7 as part of a systematic intimidation tactic and subversion of the bargaining process during the 16-week strike? Will he not agree to attempt to determine whether or not Pilkington Glass had actually decided before the strike to close down this line permanently?

Hon. Mr. Elgie: Mr. Speaker, if that allegation is being made by workers or worker representatives, then the Ontario Labour Relations Board should hear about it.

[Later (3:00):]

Mr. Cassidy: During the course of the discussion just now about the closing of the Pilkington plant in Scarborough, the Minister of Industry and Tourism (Mr. Grossman) informed this House there was a plant in Owen Sound, the Canadian Pittsburgh Industries plant, which would in fact be supplying auto glass and is supplying some right now.

The minister was ill informed, Mr. Speaker; his information was inaccurate. We have checked with the company. They are not providing automobile glass right now. They may be doing it for next year. If the minister’s information in this case reflects his knowledge of the industry in general, then the workers of this province are badly protected by this government.

[Reverting (2:36):]

BRANT DISTRICT HEALTH COUNCIL

Mr. Nixon: Mr. Speaker, I would like to direct a question to the Minister of Health, having to do with the acceptance of the resignations of eight members of the Brant District Health Council, with which he has been somewhat involved. Does the minister not agree with, or at least understand, the problems the members of the health council in Brant are experiencing, which I suggest are part of the problems of other health councils, that put them in conflict in that they are attempting to be an advisory group to the minister at the same time they are supposed to be spokesmen for the community?

Would the minister not agree that instead of simply accepting these regulations and throwing additional problems into the health situation in Brant and Brantford, he might very well put his mind to clarifying their terms of reference, which is really all the dissident members of the health council are asking, so that they will know in the future precisely what they are expected to do and so that they will not be seen simply as whipping boys for the minister, who is trying to shove his responsibilities off onto them?

Hon. Mr Timbrell: Mr. Speaker, I certainly don’t accept the latter part of that question. Let me, if I may, just take a few minutes to describe the message that I consistently have given to the health councils in the three years I have occupied this position. That is that clearly the ministry must retain and must carry out the responsibility for establishing provincial standards. Whether it is the level of funding for health units or the standards for beds or whatever it might be, health planning clearly is best effected when it is assisted by local people.

We accepted a long time ago that having a large concentration of bureaucrats at the centre of the system, at Queen’s Park, is not the answer. It is interesting that a recent report prepared for the American government pointed to the Ontario system as a model for health planning, pointing out that we have fewer than one civil servant for each hospital in the institutional division of our ministry, which is a little known fact.

In the three years I have been minister I have met with countless health councils. Wherever I travel in the province I make a point of sitting down with them. We have held a conference regularly once a year for the health councils to review current issues and to explore any problems they are having.

With respect, I think their role is clear: they are advisory. We will accept our responsibility, certainly, for setting the standards: we look to them for advice on how the standards can and should be applied. Clearly that is not easy, especially when you are looking at the institution affected, because you are dealing with traditions, with vested interests, and if I may be so bold, sometimes with empires that have to be questioned before you can arrive at a conclusion.

This was a most unfortunate situation, because we are talking about some extremely well qualified people. I regret very much losing their services to the health council, but it was clear on the advice I had from the chairman of the health council, in a telephone conversation as well as a letter -- and if the honourable member hasn’t seen a copy of that letter I would be glad to share with him or any other member -- it was clear, based on that advice, that we were dealing with something which was inevitable. In the interests of ensuring that the council did not become a lame duck council, and in the interests of carrying on their work in Brant county, I regrettably had to accept the health council chairman’s advice to accept the resignations forthwith.

Mr. Nixon: Would the minister not agree that a rubber-stamp council would even be worse? If he is prepared to accept a recommendation from the chairman that eight members of the council should in fact be dismissed, although he did it by accepting their resignations, the chances are the minister is going to get a very pliable group representing the community of Brantford. Such a group will not have the confidence of the people in Brantford and which will leave the minister free to do as he is observed to have done, which is deal directly without going to the council anyway.

Hon. Mr. Timbrell: I am glad the member raised that last aspect, because it seems to me there is a misconception abroad in Brant county which I would like to clear up right now.

There has been a variety of meetings in this last year. The council, the ministry and everyone concerned have been bending over backwards so that we can all work together to develop a rationalized plan, viable from many points of view, for the hospitals in that county. At every meeting in which I have participated, the district health council has been represented by the chairman at least and the executive director, and sometimes other members of the council.

Mr. Nixon: They have heard the word “rationalization” only from the minister; it didn’t come from the council.

Hon. Mr. Timbrell: With respect, I don’t believe that is correct, not in the slightest.

Mr. Nixon: That’s what they resigned about.

Hon. Mr. Timbrell: No, with respect, I think it is broader than that. I make a point of making sure the health councils are involved, because one of the quickest ways to destroy the health council is to allow unfettered end-runs and I don’t allow them.

Mr. Makarchuk: Supplementary: I hope the minister is aware that all these handpicked Tories will be supporting the Attorney General (Mr. McMurtry) at the next leadership convention.

Would the minister state whether he did meet with the four administrators of the hospitals in Brant without the benefit of any health council representatives being present? Further, in view of the fact there are vacancies on there, would the minister consider the possibility of holding open public meetings for the election of other representatives to the health council?

Hon. Mr. Timbrell: I am sorry; perhaps because there was a comment behind me, I missed the very first part of the member’s question.

Mr. Makarchuk: Did the minister meet with the four administrators from the hospitals in Brant without health council members being present? If so, why did he, when there is a health council?

Hon. Mr. Timbrell: I have already answered that. I said at every meeting in which I have participated with representatives of the hospital, representatives of the health council have been present. What is more, both administrators and board representatives, usually the chairman and in several cases the vice-chairmen as well, have been present.

Mr. Speaker: A new question.

Mr. Makarchuk: He hasn’t finished. What about public elections?

Hon. Mr. Timbrell: With regard to the latter, once the health council, working with the hospitals and the medical society, has been able to complete its implementation plan for rationalization, I anticipate early in the new year we will be advertising in the area for interested individuals to come forward, and through the health council we will interview prospective candidates and appoint new members.

CLEANUP OF SPILLS

Mr. Martel: I have a question of the Minister of the Environment. In view of the spill of gas by Bot Construction Limited in 1976 and in view of the spill of gas just recently near Coniston, both of which have resulted in the contamination of the wells of the residents living adjacent to those facilities, can the minister indicate how frequently this type of spill is occurring in Ontario and who is responsible for paying the cost of providing temporary water and bringing about permanent solutions for the lack of water for those people whose wells have been affected?

Hon. Mr. Parrott: I hope my memory doesn’t fail me on this occasion. I would think there are in the order of 1,000 spills a year. I could be wrong on that and I will certainly correct it if I am wrong. There are a large number of spills of petroleum products. They are not all of large magnitude; some of them result in no harm, but some of them certainly do.

With the new legislation, the issue of who is responsible will be very clear.

Mr. Wildman: Who is responsible now?

Hon. Mr. Parrott: I guess tomorrow night we will have the privilege of seeing that bill become a fact. At this minute in time it has to be done by negotiations among the companies, ourselves and the residents, which is an unsatisfactory arrangement; that is why the bill was brought into this Legislature.

In the one the member mentioned, the responsibility is clearly the company’s and I think it is taking that responsibility. It certainly isn’t finalized yet. The long-term solution will be a communal well. Right at the minute, as the member is probably aware, there are only filters on those wells. We don’t think that is the long-term solution for the problem.

[2:45]

Mr. Martel: In view of the letter which the ministry staff recently sent to a number of my constituents, a letter which I find offensive in its tone to people whose wells have been polluted, can the minister tell me why there would not be an agreement worked out to operate some of the equipment that’s necessary, whereby the people whose wells have been damaged would not have to pay for appropriate electrical systems? If there was damage caused by the equipment that was used, the constituents, the people whose wells have been damaged, are held responsible for any damage created by that equipment. Why should the onus be on the people whose wells have been damaged as opposed to those who have created the pollution?

Hon. Mr. Parrott: I had a chance to read that letter. It’s my interpretation that the onus for malfunction of the equipment is only so far as it would affect the owner’s residence, the same as though he or she had purchased a filter or a pump from someone in the private sector, and if there was a malfunction of that pump the person wouldn’t go back to the person who originally sold him that equipment. That’s how I interpret that. If the honourable member thinks it is beyond that, I certainly would check it again, but that equipment is basically on the property of the person, and therefore if it does go wrong, it seems to me it’s reasonable to expect they would look after the rented equipment as though it was their own.

NON-ALCOHOLIC WINES AND BEERS

Mr. T. P. Reid: I have a question of the Minister of Consumer and Commercial Relations in regard to dealcoholized wines and beer.

Since the Legislature amended section 3 of the Liquor Control Act in 1975 to allow the minister to place dealcoholized beverages in liquor stores across Ontario, why has the minister not gone ahead with this matter to give people a choice of beverage for themselves and to serve to their guests? Has the minister arrived at any policy in this matter?

Hon. Mr. Drea: Mr. Speaker, the availability of this product -- I don’t like to say dealcoholized because it is not something the alcohol has been removed from; it is made so that the alcohol content is very low -- the acceptance of them in the grocery store, or in the delicatessen, has proved relatively successful. Since that provides an immediate market, it’s been chosen to go that route with the product rather than carry it in the liquor stores.

Mr. T. P. Reid: Supplementary: That really isn’t satisfactory. As the minister well knows, there are lots of problems in selling them in grocery stores.

In view of the fact that the Treasurer (Mr. F. S. Miller) has indicated there is going to be $412 million revenue coming from the sale of alcohol in the province, does the minister not think it might be incumbent upon him to give people that choice by allowing these products in liquor stores? They would then be widely available for people who wish to provide beverages for parties and social gatherings at that same place so that they will be able to have a choice of either an alcoholic beverage or one without the alcohol in it.

Hon. Mr. Drea: I will be very glad to take a look at it again, but it seems to me this is the representative of a party that wants beer and wine sold in grocery stores; that was indicated at their last convention.

We are selling the non-alcoholic beverages. There is no restriction on them being sold in the grocery stores, or outlets other than those of the LCBO. If the member is so intent upon everything being convenient to the public in terms of the grocery store for alcohol products, I must admit I am a little bit baffled by the fact that unless they are sold in a liquor store they won’t have acceptance, but I will take a look at it.

They have been, within the limits that can be expected, relatively successful products for the public. If the member is here to tell me there’s a great demand out there, that’s just not so. One of the problems, too, is that the demand for it isn’t quite what people anticipated.

Mr. T. P. Reid: Does the minister have a poll on that?

Hon. Mr. Drea: No, I don’t have a poll on it. I happen to know the brewery and the other people who are the agents for that product.

ROYAL COMMISSION LEGAL FEES

Mr. Germa: Mr. Speaker, my question is of the Attorney General, if I could gain his attention. The question is in reference to the rate of pay to legal counsel for royal commissions. Given that his guidelines, as stated on May 11 in this Legislature, were that legal counsel for royal commissions would be paid at the rate of $85 to a maximum of $850 per day, how does the Attorney General justify allowing Mr. Strosberg, who is the counsel to the commission looking into the confidentiality of health records, to bill in excess of $850 per day? Can the Attorney General explain to the people of Ontario that they are getting good value for their money, keeping in mind that even $850 a day is equal to seven weeks’ work at the minimum wage this government imposes on the people?

Hon. Mr. McMurtry: I think the figures as set out in the guidelines referred to by the honourable member are correct as I recall them. So far as Mr. Strosberg is concerned in relation to the Krever royal commission on the confidentiality of health records, Mr. Justice Krever made a request of the ministry that, given the demands being placed on Mr. Strosberg, that he as commissioner was requesting the ministry to allow Mr. Strosberg to work more than the hours than would normally be expected. Rather than be perceived as not wanting --

Interjections.

Hon. Mr. McMurtry: They asked me a question, Mr. Speaker. I am doing my best to answer it and they don’t want to hear the answer. I am surprised. What does one do about such rudeness?

Mr. Speaker: Just persevere.

Hon. Mr. McMurtry: Persevere; upwards and onwards. So given the very crucial importance of this commission and given the importance of Mr. Justice Krever’s task, we in the Ministry of the Attorney General did not want to appear to be not assisting him, because I am sure if we had said no, we are not going to allow any departure from the guidelines, that very New Democratic Party caucus would have been accusing us of interfering with Mr. Justice Krever’s ability to do his job.

Mr. Germa: Supplementary: Could I ask the Attorney General, is Mr. Strosberg also allowed to bill for Saturdays and Sundays? How does the Attorney General monitor his billings to ensure that the people of Ontario are getting X amounts of hours’ work for each hour that he bills?

Hon. Mr. McMurtry: I understand they are monitored by the commissioner, Mr. Justice Krever.

Mr. Nixon: Supplementary: I understand this matter has been repeatedly brought to the attention of the Attorney General, most recently just before the matter that was raised that had to do with his predecessor, John Clement, who is being paid $750 a day by Toronto to look into the size of policemen. Does the Attorney General not feel that somewhere between the minister’s policy of noninterference and handing them the keys to the treasury there is a reasonable procedure whereby we can see that there is adequate counsel provided to our royal commissioners and at the same time the people can be assured they are getting value for money?

Hon. Mr. McMurtry: You have to distinguish between the nature of commissions. When a judge is appointed to act as a royal commissioner we are really talking about something in the nature of a judicial inquiry. It has always been the policy of this government, and quite properly so, to allow a judicial officer conducting a judicial inquiry to choose his or her own counsel and to make some of the basic arrangements in order to enjoy and be perceived to enjoy the necessary independence necessary for him or her to carry on a judicial type of inquiry.

STERILIZATION OF THE MENTALLY HANDICAPPED

Mr. Sweeney: A question to the Minister of Health, Mr. Speaker: Given the release last week of the report of the Law Reform Commission of Canada on the sterilizing of mentally handicapped, given the fact the ban in Ontario is due to expire at the end of this month, and given that on September 6 the minister indicated in Charlottetown that he expected to have legislation before the House on this issue this session, where is that legislation? What is the policy of Ontario? What is going to happen?

Hon. Mr. Timbrell: Mr. Speaker, I will be making a statement on that matter dealing with the question of the legislation later this week. As regards the federal report to which the member refers, it is interesting to note they have basically taken due cognizance of the options paper we released in September in Charlottetown.

Mr. Sweeney: Supplementary: How does the minister react to the statement within the report that most such sterilizations are done to protect society from the mentally handicapped rather than in the best interests of the individual himself or herself?

Hon. Mr. Timbrell: It is one of those situations in which we, as legislators, should be careful not to presume to say absolutely, one way or the other, what is right and what is wrong. It is a very difficult situation involving the rights of parents as well as the rights of the individual, particularly the mentally incompetent individual, and one we are going to have to take very great care to resolve.

PARKS CANADA TRANSFER

Mr. Samis: A question to the Treasurer, Mr. Speaker: Could the Treasurer tell the House what position his ministry has taken on the proposed transfer of Parks Canada’s Ontario headquarters from Cornwall to the city of Peterborough with a loss of 180 jobs and a payroll of approximately $3 million?

Hon. F. S. Miller: Mr. Speaker, that issue I do not believe has come directly to Treasury. It may have. I have heard of the proposal but only indirectly, not through any direct contact with my federal colleagues. It may have been through the Minister of Natural Resources (Mr. Auld), who may have heard of it.

Mr. Samis: Supplementary: Since the minister’s predecessor, the president of Union Gas Limited, made a very strong public statement opposing the transfer from Cornwall to the city of Guelph in 1977, does the minister not think that in terms of regional development such a change would be not in the interests of eastern Ontario, as the Premier (Mr. Davis) said to some of his friends in Cornwall on his last visit?

Hon. F. S. Miller: I hope I will have the chance to do the same again very shortly.

Mr. Samis: I know the minister will.

Hon. F. S. Miller: Certainly it is not in the interests of the city of Cornwall. I think I could agree completely.

LIVESTOCK PAYMENT DEFAULTS

Mr. Riddell: A question to the Provincial Secretary for Resources Development, Mr. Speaker: As an overseer of the program of the various ministers under his jurisdiction, and in the absence of the Minister of Agriculture and Food (Mr. Henderson), who I understand is still fighting the flu bug, could the provincial secretary tell me why the Minister of Agriculture and Food does not consider the problem of default in payment for livestock to be of sufficient importance or priority to be dealt with in this session of the Legislature, in view of the fact 11 packing plants have defaulted in payment over the last few years, five of them in 1979; and in view of the further fact that this legislation was first promised during the 1977 election, and again by the former Minister of Agriculture and Food, who indicated that legislation would be undertaken in the fall session, in other words this session?

Hon. Mr. Brunelle: Mr. Speaker, obviously if my colleague is not back due to ill health within the next few days, I would be pleased to reply to the honourable member.

[3:00]

Mr. Riddell: Supplementary: When the provincial secretary is talking to the minister, would he ask him if he is aware of the shock and the frustration this decision not to come forward with the legislation has produced in the cattle industry, which has been working with the Ministry of Agriculture and Food now for over four years in developing acceptable proposals which were to have been introduced in this session? Is this failure by the minister to proceed with the legislation an indication that this government is opposed to providing legislation for an industry-wide program of protection against default in payment for livestock purchases?

NURSING HOME CHARGES

Mr. Grande: My question is to the Minister of Health regarding the scandalous ripoff of $12.15 per month of every resident in nursing homes since 1976, with the continued blessing of the Minister of Health and his ministry.

In view of the fact that in an answer to the Legislature on April 14, 1977, the minister stated that a nursing home inspector’s report “confirmed the $10 a month charge for marking, mending and ironing of resident’s clothes was being applied to all residents, not just those who used the service,” and that on November 8, 1977, in his answer to a question on the order paper, he stated he had no statutory jurisdiction because these services are uninsured services, could the minister inform the Legislature what are the blocks which prevent him from gazetting the regulation he proposed in November of 1977 in the recommendations from the review of nursing home legislation to prevent what he calls the excessive rates to residents? Would he also inform the House why he does not prevent nursing houses from applying the exorbitant charges to residents who do not use the services?

Hon. Mr. Timbrell: Mr. Speaker, I had difficulty hearing the question, so I better take it as notice, get it from Hansard, and give an answer later.

Mr. Grande: Supplementary: While the minister takes it as notice, would the minister realize and be concerned about the fact that the nursing home operators, since May 1976, have sponged from the residents $18 million to date, and also be aware that for every month he delays gazetting that regulation, which he’s had ready since 1977, $328,000 more is being taken from residents? Further, I wonder if he would find out in the process whether the reasons --

Mr. Speaker: The honourable member is abusing the privilege of the question period. If he wants such detail, obviously, it should be secured by way of an inquiry of the ministry. Is the minister going to take that as notice also?

Hon. Mr. Timbrell: I will certainly take it as notice; and I will particularly try to determine the basis on which the member makes such allegations in such outlandish numbers.

Mr. Speaker: The member for St. Catharines has about one minute.

LIBRARY GRANTS

Mr. Bradley: A question of the Minister of Culture and Recreation: Does the minister have any plans to channel funds from the regional library systems into the large urban libraries so that they can provide these services in a given area, since it has been proven in many cases, most particularly in the Niagara region, that the regional library systems have not performed the roles for which they were set up and have encountered many financial difficulties, which have been difficult to overcome, to say the least?

Hon. Mr. Baetz: The member wanted a short answer: the answer is yes, we are actively looking into this.

REPORT

STANDING ADMINISTRATION OF JUSTICE COMMITTEE

Mr. Renwick, on behalf of Mr. Philip from the standing administration of justice committee, presented the committee’s report, which was read as follows and adopted:

Your committee begs to report the following bill without amendment:

Bill Pr30, An Act to revive South Russell Holdings Limited.

INTRODUCTION OF BILLS

CONSUMER PROTECTION AMENDMENT ACT

Mr. Swart moved first reading of Bill 200, An Act to amend the Consumer Protection Act.

Motion agreed to.

Mr. Swart: The purpose of this bill is to require that every product offered for sale bearing a product code must also be marked with its purchase price. The bill prohibits increases in the purchase price of a product above the price initially marked on it by the retailer. The bill also provides that if the price marked on the product differs from the price associated with the product code, the purchase price of the product is the lower of the two prices.

MOTION TO SUSPEND NORMAL BUSINESS

Mr. Cassidy: Mr. Speaker, I rise to move that the business of the House be suspended in order to discuss a matter of urgent public importance, of which I have given you written notice, namely the crisis in the automobile industry as reflected in the layoffs and in the very large deficit in our auto trade with the United States.

Mr. Speaker: I have received the notice of motion. The notice of motion is in order. I will listen to reasons why the honourable member thinks the ordinary business of the House should be set aside for an emergency debate. I will hear the honourable member for up to five minutes.

Mr. Cassidy: Two weeks ago I was at the General Motors plant in Oshawa. I had the eerie experience of touring an automobile plant which normally has several thousand workers, but which on that day was completely empty of workers except for one or two people pushing brooms. That reflects the fact that in the single largest industry in the province we have 25 per cent of the workers out on indefinite or on definite layoffs.

In November, 27,000 men and women in the industry were on layoff. The most alarming fact is that this isn’t just layoffs of a temporary nature which one finds in the industry from time to time. Half of those workers are on permanent layoff or on indefinite layoff, layoffs that may last for three or six months or longer, because of the crisis which is occurring within the automobile industry.

This is an urgent and pressing matter for this Legislature when one reflects on the fact that next week alone there will be 8,000 Chrysler workers in Windsor who will be put on temporary layoff by that company. Next week alone there will be 4,500 workers at the Ford plants in Windsor who will be put on layoff.

The auto parts industry tells us that they have 8,000 people or more on layoff and the unemployment rate in their industry is 15 per cent, compared to only four per cent in the industry in the United States.

The crisis is compounded by the fact that the layoffs which are now the urgent matter which we wish to have debated this afternoon are compounded by the energy crisis; by the potential bankruptcy of Chrysler Corporation, which is one of the largest industrial corporations in North America; by the huge auto trade deficit, which in 10 months has gotten to $2.5 billion, a sum which exceeds by $600 million the biggest trade deficit in automobiles and parts that this country has ever had in the past; and by the dependency of our industry on large-car production, which units are the white elephants, as I was saying in question period, because of the changes in the industry and the rapid increase in the sale of small foreign cars in the North American market.

Finally, the crisis exists because of the unwillingness of this government to fight to have Canada negotiate a fair share of automobile production in order to ensure that this major industry is no longer a drain on us here in Canada.

The minister just got up and spoke. He bathed us with his concern, but he sounded about as aggressive as a tabby cat in terms of what he was saying to the Legislature or to the companies. When we asked about what he was doing in one particular sector we learned he doesn’t even have his facts straight, and that is contributing to the crisis in the industry, which has one quarter of the whole work force in that industry out on layoffs.

When in Windsor alone the real unemployment rate is running at 17 per cent, I believe there is a crisis. When the parts industry estimates about 8,000 people out of work, I believe there is a crisis which must be debated in this House. When even General Motors is forecasting further layoffs in the new year, clearly there is a crisis.

What we would like this House to examine is not just the short-term situation, but also the inadequate response of the government to the situation and the need for Ontario to step in to see that we are producing the small cars, as well as the parts for small cars, that Ontario will need if we’re going to keep in the game during the 1980s.

We had a dialogue of the deaf just two weeks ago in trying to talk to General Motors about the $2 billion investment they say they want to make in Ontario during the early 1980s. That is well under 10 per cent of their North American investment over the next few years, yet here in Canada we have 10 per cent or 11 per cent of their North American market. We’re not getting a fair share in that particular area, and the government is not prepared to insist that we get that fair share.

Ford is planning to spend $20 billion in 1985 on new facilities. In this country we have promises of an engine plant worth half a billion dollars and a casting plant worth $50 million. It may sound like a lot but it’s nowhere near a fair share. Because we don’t get a fair share of investment, the crisis we face today is going to be a continuing crisis in this particular industry, unless we get a change in policy from this government as well as from the federal government. That, too, is a reason for the emergency debate.

Mr. Speaker: The honourable member’s time has expired.

Mr. Cassidy: I want to say finally, Mr. Speaker, that learning, as we did last week, that this government has opted out of the negotiations with Chrysler Canada is another reason this urgent matter should come to an emergency debate here in this Legislature today.

Mr. Nixon: Mr. Speaker, I have the impression, since the leader of the NDP persisted in going over his time, that he feels perhaps his case in this connection is a bit weak. We agree, however, that the level of unemployment is a matter of concern, as it was yesterday and as it undoubtedly will be tomorrow.

The Minister of Industry and Tourism (Mr. Grossman) just completed his estimates last week. There was every opportunity for the matter to be discussed and I understand it was discussed in some detail.

Naturally question period may be used, as it was today, for the kind of specific exchange of information that is useful to all members of the House, and thereby to the public at large. The fact that concurrence in the minister’s estimates will be scheduled some time later this week or early next week would provide another opportunity.

Mr. Speaker is the person who has to judge whether under our rules the matter proposed for discussion relates to a genuine emergency calling for immediate and urgent consideration. If he does so rule, we do not want to stand in the way of such a debate this afternoon. We want to associate ourselves with those on all sides who want to see the level of employment increase.

The fact is that people, not only in this province but even in this House, avail themselves of the products built by the automotive manufacturing industry in this province and built by the members of the UAW. It’s interesting that when I look over the parking lot of the NDP I see a Peugeot station wagon sitting there and a couple of Audis. While I understand they are very good cars, it seems to me their policy should begin even closer to home. If they would follow the good example of my esteemed colleague the leader of the Liberal Party and drive a Ford Fairmont, they would be well served by transportation and also serve well in supporting the industry.

Interjections.

Mr. Nixon: I’m glad to have aroused the members to my left who are expressing such concern in this matter.

[3:15]

I do recall, and perhaps the Treasurer (Mr. F. S. Miller) will recall too, that before the election of 1975 we were in a period when there was some considerable unemployment. There was more unemployment than now and the government of the day took some initiative. They withdrew the sales tax on new automobiles for a few months just before the election. They committed over $600 million to the economy at that time in an attempt to buy a majority, in which they sadly failed. It’s obvious the government can take action when an emergency presents itself. It may well be there will be such action presented by the government, particularly if they sense an election in this province in the offing.

We are in your hands, Mr. Speaker. If, in your judgement, this is a matter of urgent public importance, we are quite willing, in fact anxious, to proceed with the debate.

Hon. Mr. Grossman: As we’ve discussed time and again during question period in this House, we have what is obviously a long-term problem in the automotive industry. It’s one we’ve been aware of for some time and have done a considerable amount of work on, as has the federal government.

The point I want to make on whether we should have an emergency debate here this afternoon is that this situation is not one that is solved on the floor of this Legislature. Many other forums and levels of government must be involved, because we don’t have a problem that’s unique to Ontario in any way. It involves discussions in the House of Commons, in the United States Congress, in the United States Senate. It involves long-term solutions dealing with everything from the availability of gasoline and energy right through to tax situations and the auto pact, hardly matters which can be resolved here this afternoon.

In terms of the extent of the crisis, it is a difficult one. I won’t apologize to the leader of the third party, who has now left the assembly, for being concerned about the situation.

Mr. S. Smith: He’s out warming up his Peugeot.

Mr. Martel: Where is dirty little Bill?

Hon. Mr. Grossman: He’s out counting Peugeots.

The fact is the situation is not nearly as critical -- I’ve only got three minutes, guys -- as it was in 1975. The layoffs to date, while they’re serious, are several times smaller than in 1975.

For example, we have not received representations from the union and others, as was the case in 1975, leading to some of those very constructive measures the member for Brant-Oxford-Norfolk has talked about that this government took at that time.

May I say there are other forums in which this matter can be discussed. We did discuss it in my estimates last week and, for the benefit of the House the third party did not take an extensive length of time on it, although we did cover the matter quite well. At that time we discussed it, as we had earlier, and yet another opportunity is coming in terms of concurrence in those estimates in this House. Treasury estimates are due to proceed this afternoon. This is another point of impact for a proper discussion on the auto situation. Labour estimates are on, I believe, this evening or tomorrow evening, which is another opportunity where this might be discussed rather than taking the time of this House.

The main point is this: what has happened in the car and automotive industry is a severe market problem. Sales are off in terms of United States cars, if not Peugeots. In terms of North American vehicles they’re off 20 per cent this year. That is not a problem created by either this government or in this Legislature, nor is it one that can be solved in this assembly.

The sales for the Big Three North American automobile makers are down as follows: Chrysler is off 39 per cent: General Motors is off 21 per cent; and Ford is down 20 per cent. If we are to take the time of this House to discuss that North American fall-off in market, I suggest we will have to be here day after day having emergency debates as various sectors of the economy go through cyclical changes in markets. If we have an emergency debate today on this subject, tomorrow it will be on wheat, agricultural products, electronic products, electrical products or whatever. The important thing is whether this province is holding its own during those cyclical changes.

If this debate proceeds we will have an opportunity to talk about some of the structural things we are doing to buffer our people against these situations. I would remind the House that we obviously have succeeded in some of those things, because our layoffs so far in the automotive industry in this country are 9.4 per cent, while layoffs in the United States are 14.8 per cent to date.

Mr. Speaker, I say to you quite simply, if this situation calls for an emergency debate now, basically upon the North American market for the automobiles being made, then I say to you we will be having emergency debates every time there is a change in market conditions throughout North America.

Mr. Speaker: Order.

I have listened to the debate from representatives of all three parties. I listened very carefully to the question period. While everybody is of one mind that it is of great importance to everybody in Ontario, it is a question that has been raised here on numerous occasions.

There has been ample opportunity for discussion, both in question period and in estimates. As has been mentioned, there will be a further opportunity later on this week during the concurrence motion on estimates of the Ministry of Industry and Tourism.

I find this matter does not lend itself to an emergency debate because it does not highlight one specific event. It must relate to a genuine emergency, calling for immediate and urgent consideration. It seems to me that is one of the issues we have been involved in on a continuing basis over the last several weeks. I find it does not meet the requirements of standing order 34.

ORDERS OF THE DAY

House in committee of supply.

ESTIMATES, MINISTRY OF TREASURY AND ECONOMICS (CONTINUED)

On vote 901, ministry administration program; item 1, main office:

Mr. Chairman: Are there any further comments or questions on item 1 of vote 901? The member for London Centre.

Mr. Peterson: Mr. Chairman, now that the diminutive Treasurer is back in the chamber, perhaps we can proceed. There are a number of items I would like to discuss with the Treasurer, if that is possible. I assume he is prepared for any contingency and every eventuality, because if he isn’t forthcoming in all his answers and able to answer them quickly and forthrightly we may have to take more serious remedial action.

At the outset, I would like to ask the Treasurer about the whole question of oil prices, which I have not yet discussed. I am sorry if you are having trouble hearing me, but I have a grievous disease. I came out of my sick bed this morning just for and exclusively for the pleasure of spending the afternoon with you here today. I hate to say this, but I think I contracted the disease from the Minister of Education (Miss Stephenson). Wherever she goes she spreads plague, disease and scurvy.

Mr. Chairman: Maybe you should ask your questions while you still are able.

Mr. Peterson: I was habitating the same chamber with her on more than one occasion -- the legislative chamber, I hasten to add. I feel I may have contracted it from her. I can tell you it is probably the most important influence she has had, lately at least.

I want to talk about oil prices to the Treasurer. I don’t want to thresh a bunch of old straw, but I want to point out a couple of my concerns. I want to take you back to what I consider was an excellent speech you made to the bar association in Calgary, when you were supposed to be on the same platform as the honourable Merv Leitch -- or was it Merv Leitch who didn’t show? No, it was Hnatyshyn, the Minister of Energy, who didn’t show.

You were discussing the rewriting of the Canadian constitution by way of petro dollars, and frankly, that was the best speech I have seen you make. I am not sure you wrote it yourself. It is the only speech I have seen you make, now that I am on the subject. It was good, it took you six months’ worth of effort to do it but perhaps it was worth it. One good one every six months is better than a couple of bad ones per week perhaps, if that is your point of view. I want to talk to you about that.

One of the things that concerns me about your government, and I am being very frank, is you have expended an incredible amount of energy, political energy, and credibility -- and I am not talking just about you; I am talking about the first minister and I am talking about the Minister of Energy (Mr. Welch) as well -- in taking your strong position to Ottawa and taking it across the country.

You knew from the beginning you were going to lose. I don’t want to stand here and accuse you of political dishonesty; you knew you were going to lose. There were a lot of fine headlines written out of that. I am one who thinks you substantially blew your position in that energy paper of last summer when you said it should only be one dollar, but if it is more than one dollar here is how it should be distributed.

In my judgement you should have carried the full weight, force and efficacy of your position to have a far more narrow range of options, recognizing the inevitable. Everyone knows energy prices are going to go up tomorrow. I am not happy about it. I am one of those, I guess, who has taken the view that it is inevitable and we must steel ourselves against it. I don’t like it, but there is a lot of prophylactic action we could take in the meantime to insulate our own economy and to help out our own economy. I am upset about the way you dissipated the efficacy and the strength of your argument.

What you have done, in my opinion, is use a disproportionate amount of your time, energy and resource beating your collective heads against a wall when you knew you were going to lose. I subscribe to the view of the Leader of the Opposition (Mr. S. Smith) that you did not carry that argument well and you did not serve the province well, but what concerns me is there are two areas in which you do have a substantial amount of jurisdiction, as a matter of fact the only jurisdiction. I am referring to electricity prices and I am referring to natural gas prices.

I have asked and my colleagues have asked the Minister of Energy about those matters in the House and received extremely flip, superficial, and I would say juvenile, answers to our questions. You will recall last week I asked the Minister of Energy what he was going to do about the rate application from his friend Darcy McKeough of Union Gas.

Just in case you are not aware, I am going to tell you what that rate application is for. I am not talking about the automatic increases pegged to the price of oil, because we recognize the federal system, for that is pegged at 85 per cent on the BTU value of the price of oil. I don’t like that either; that should be unpegged, that should be unhinged. I agree with your position; you should fight it very hard. I will get into that particular aspect in a moment.

The Minister of Energy had the temerity to say to me, “If that is your view, that Union Gas shouldn’t get the 42 cents per thousand cubic feet, non-stepped price increase, then you should go to the Ontario Energy Board and make a submission.” He accused me of grandstanding because I disapproved of a system whereby the small residential consumer and the small commercial consumer are going to subsidize large business and the large consumer. That is virtually what Union Gas has asked for.

I am telling you that you have jurisdiction. You can’t just fob it off and say that is the Ontario Energy Board. The Ontario Energy Board is a creation of your government, of this Legislature. It is not good enough to say you don’t have jurisdiction. You should be there; you should have made a presentation.

What is your position on that rate application of Union Gas? Are you for it or against it? I don’t know what the Minister of Energy’s position is because in his charming little squirt way he weaselled out of the question and didn’t deal with it.

[3:30]

What worries me about this Minister of Energy, who is a man of a capacity in my opinion, and certainly he has the greatest capacity of anybody I’ve seen in that ministry, is that so far he has used all of his energy to be charming and avoid the question and avoid the real issues that this province is facing in trying to keep the government out of problems, as opposed to using the creative potential in that job to do something for this province over the next 10 or 20 years.

I regard the job of the Minister of Energy to be creative as probably the most important one in the ministry today. I have said that of all the ministers to date; I have said that for four or five years. I am concerned that he is going to take the position that his job is only to survive, keep the government out of trouble and not be creative. I haven’t seen any creativity out of him whatsoever.

Where it relates to the Treasurer is that everything he does bears so very directly fiscally and economically on the prospects of this province. That’s why the Treasurer has to be concerned. He cannot let the Minister of Energy run on his own; he must be involved in his decisions. When the Treasurer allows the Minister of Energy the 16 per cent increase in Ontario Hydro for next year; when he allows what I consider this excessive, unfair, unrateable increase -- if he does -- of Union Gas, then it’s going to reflect very badly on the consumers and on the economy of this province; because at the same time we are stuck with automatic increases which there isn’t very much we can do about, barring some new redistributive mechanism from the federal government.

In brief those are some of my views. I am very interested in the Treasurer’s opinion about what I have just said and what he is doing about it.

Hon. F. S. Miller: The basic assumption of the argument the honourable member just made was that the paper, and the arguments that followed the paper, including my speech, were all made in the certain knowledge that Ontario would not win. If by that it means there would be no change past the one dollar per barrel on January 1, 1980, he is correct, I am sure. Obviously with world prices themselves escalating on an irregular and unpredeterminable basis, one really can’t tell what the world price alone will be, let alone what something that is used internally will be.

Mr. Peterson: If in fact there is a world price, and there probably isn’t.

Hon. F. S. Miller: The more we have problems, such as Iran, the more likely the, let’s say, monolithic world price set by OPEC is going to hold, because the spot price market appears to be taking over and panic buying then takes place.

I was told Japan, for example, paid $40 a barrel for the oil the Iranians either refused to ship to the US or the US refused to accept from Iran, whichever was the case.

Mr. Peterson: That’s a big quantity.

Hon. F. S. Miller: That, of course, is the very kind of action which can add fuel to the fire, which is a poor metaphor.

I would have to say that Ontario entered that debate recognizing that a win would be hard to define, because no one wanted to see any increase at all. But Ontario argued strongly and I think, though I won’t know for a while, with some measure of success, that Canadian prices should bear some difference from world prices since the whole economy is going through the kinds of strains so clearly demonstrated in the debate about the emergency debate today.

We know that any increase in the price of energy, or in fact anything that adds to the cost of living, the cost of manufacturing Canadian goods that can’t be recaptured within our own economy, can only eventually weaken our economy, cause some uninflation and perhaps re-enforce a recession.

So we entered the lists knowing when we came out we may be winners but would be blamed for losing, blamed because some change took place. That makes it a difficult political decision, however we are satisfied that the changes would have been of a much greater order and would have had much less regard for the Ontario scene had Ontario not entered into the argument. This is because a number of other provinces, for very widely varying reasons, had no good governmental reason for opposing massive increases in the price of oil and they were letting the federal government know that. Obviously if you produced it you had no reason to oppose it, even though it isn’t in the interest of your taxpayers to some degree.

If you lived in Quebec, or if you were a member of the Quebec government, you had two good reasons for supporting world price. First, all the oil used in Quebec comes in today at world price and it is subsidized by the federal government. This is something that that government hates to recognize. With a referendum coming along it hates to admit there’s any umbilical cord of federal money flowing in one direction only to that province. One very visible example of that flow of money -- I’ve seen the figures; they are in the hundreds of millions of dollars per year -- is the federal government payment to offset the difference between world price for all the oil used in Quebec and the price the consumers pay.

The second good reason is one much more understandable, and I would think it is one much more readily accepted by all of us, and that is that obviously the government of Quebec, having made a huge investment in electric energy and having a number of reserves untapped yet, can see that it will have a pretty predictable price for its electric energy for the foreseeable future. Once committed to development the only thing one has to worry about today is the change in the costs of the capital plant between the time one decides to construct it and the time it’s finally built. Once it’s built one doesn’t have to worry about fuelling it. Labour costs are a tiny part of the cost of operating a hydroelectric system, a hydro-based, that is water-based system. However in Ontario 37 per cent of total energy is from water and 73 per cent is from some kind of fuel source, so we don’t have that assurance of the cost in the future. Obviously Quebec would say, “In our industrial planning interests, anything that makes our electrical energy even more competitive relative to other kinds of fuel makes our province more attractive to potential industrial investors vis-à-vis the other parts of North America, or indeed the world.”

I was always mystified by the arguments from any place but Newfoundland on the east coast -- Newfoundland at least hoped to get oil -- had some reason to believe it might find oil as a result of the newly awarded offshore rights. I believe every bit of electricity in Prince Edward Island is oil-produced, but I am not sure how much of Nova Scotia’s electrical energy is generated from oil. I know the bulk of it is --

Mr. Laughren: Do you agree with Clark’s position on that, by the way?

Hon. F. S. Miller: I am only discussing the answer to the question on energy today. I am mystified because they say, “Yes, we are quite happy to see our people pay world price for oil for their cars, for their home heating, but when we use it to make electricity you will have to subsidize it.” If they got that they would be gaining the best of both worlds. They get a federal equalization transfer because the price of oil has gone up and they get a federal government subsidy to burn the stuff. I think that can be seen through patently. I am intrigued, too, by my friends who operate the Alberta Heritage Savings Trust Fund loaning money to those provinces at prime triple rate A rating -- or whatever it is called, the triple A rate -- for some of their utilities or some of their government purposes or both, in effect lending money at less than the rate that the credit would traditionally warrant -- in effect, I believe, buying support for an oil pricing policy by subsidizing an interest rate for government spending. That is a very interesting set of circumstances.

Mr. Peterson: That is something the teachers have done for you over the years.

Hon. F. S. Miller: I find that hard to follow.

Mr. Peterson: The teachers superannuation fund charges you below market rates.

Hon. F. S. Miller: I would challenge that currently.

As to the second part of your argument, you said we made our case weaker by broadening it to indicate how to redistribute our revenues if increases took place. In all the rhetoric on this matter that has gone on in the last four or five months, really every bit of it that has been reported in the press dealt with absolute price. Very little of it dealt with the redistribution of income and the fundamental structure and mechanisms of the transfer of moneys within the Canadian confederation on an historic basis.

We argued that should we be wrong, should the increases exceed those we thought should be put in place because of an impending recession, because of the oil industry’s inability to use more investment dollars in the short term, we must have a formula to prevent a government, a provincial government in particular, being the major beneficiary from the transfer of funds, simply because in the Canadian context that was not the historic mechanism or way of doing things.

That is all seen as sour grapes. I can understand it, but I must admit I feel, and I hope you feel, a bit sorry to find a number of Canadian provinces so pleased to see that they can turn down something Ontario needs, after for many years, in my opinion, profiting from an Ontario position under Mr. Robarts and under Mr. Frost -- I am thinking of prior to my present Premier -- that always emphasized the responsibility of Ontario to a relatively strong Canadian government and to its central duties to make sure that certain minimum levels of government services were available, regardless of the provinces’ fiscal capacity.

I hope it is something like the freedom of some of the Third World nations when they are finally liberated from a colonial regime. I hope it is short-lived. In other words, once the euphoria of suddenly saying “We can tell you off” passes, I hope there will be some reconsideration in a sober way as to what this country is all about, the fact that we do use and need a central government to carry out duties and redistribute moneys.

Once the decisions are taken on the price of oil, I would say the second part of that paper is going to be the major part, the part we have to spend a good deal of time working on in a Canadian context. We in Ontario recognize we will have some difficulty having credibility because we have been well off in the past and because the transfer payments from this province by any route, whether it is general taxation through old age security or equalization payments, no matter what the mechanism has been, have not necessarily been recognized as being based on Ontario’s wealth or appreciated if they were.

You mentioned something about the price of energy going up tomorrow. I don’t know what is in the budget. I am only looking at the same kind of predictions you are, predictions that we can see anywhere from 23 to 30 cents a gallon change in the price of refined products, fuels for transportation basically, I would say, not necessarily for home heating. That is not a change in the price of crude. You know that. While it is very critical, it is not the kind of argument Ontario was advancing in the papers because at that time it was not predicted.

[3:45]

We were talking about the price of the raw material supplied for industry, whether for heating or for reprocessing. As I understand the advance guesses, the money the federal government is talking about levying in the budget will be on specific uses or types of a distilled product basically for transportation. Tomorrow night’s budget will answer that question and only then will I know who’s right.

The member said our jurisdiction applies to electricity pricing and natural gas. Of course, on the natural gas I guess we’re limited to the distribution costs of natural gas, not the provincial gate price.

Mr. Peterson: That’s what I said.

Hon. F. S. Miller: Yes, I think later on you did. I made a note. I don’t think the member had at the point I wrote down my note.

The jurisdiction in terms of electrical pricing is again of the same nature. That is the variation in rate between types and classes of users or quantities of use, not as I read it, on the global gross selling price of Ontario Hydro as output. Because if I understand the Power Corporation Act -- which I don’t believe is administered by me; I believe it’s administered by the Minister of Energy (Mr. Welch) -- ever since Sir Adam Beck, a fundamental principle has been that power from Ontario Hydro will be sold at, quote, “cost.”

Cost can be arrived at by charging one consumer more and another consumer less. I think that is a kind of argument we are going to see a good deal of discussion about before too long, because we’re going to go into discussions as to whether one should charge large consumers more to limit their consumption or recognize that distribution costs to large consumers are less and encourage their use so we’ll have a good strong industrial base.

You’re going to hear all kinds of points of view on it; I don’t want to get into them today. I would just say that I don’t believe you want to throw away yet the principle that the gross selling price of electricity in Ontario should match the gross cost of generating it. That’s a principle that has stood well for many years. I would argue though that one of the key things is what is gross cost? How much should you lay aside in a given year to create capital, limiting borrowing? Because we guarantee a goodly part of the borrowing for Ontario Hydro, I would say we’re probably more highly leveraged than privately owned utilities -- 80 per cent or 82 per cent or whatever it is of our total equity is in debt. I’ve been told that a more normal US rate would be 50-50.

Obviously, if one elects not to add to the rate today to create capital for investment for immediate increase in output and instead goes to the market to borrow that money and therefore keeps a high debt to equity ratio, then the final cost of power will go up in total. I think that is one of the areas where a government does have jurisdiction -- I’m not saying government does, but traditionally Hydro and/or government has been involved in that process. I don’t think Ontario has ever directly leaned on Hydro, but we’ve never tried to duck our final responsibility.

That is exactly the same kind of question I assume the member implied is before the Ontario Energy Board for the distribution of gas through Union Gas. I don’t have an answer for it. I think one can argue with good logic both ways. One obviously wants to price energy no matter what its source or type today so that one does not encourage waste -- I don’t think we need to worry about that; that has become academic. The price is going up fast enough anyway.

If you’re an industrial user making steel, the price of natural gas, no matter what we do with it, is such that you’re going to take measures to save energy you wouldn’t have taken 10 years ago. I think the member would agree. That’s true of electricity. So I would say that industrial users have good immediate economic reasons for cutting back in consumption.

The real question becomes one of what costs should be apportioned to the bulk user and what to the smaller user. I am not going to prejudge that. I am going to listen with great interest because I think it is going to apply equally to electricity and to natural gas in the next while.

I think any one of you in this room could stand up and make arguments for whichever side you decided to take and sound equally impassioned in the process. There is only one political side and you know it. The question is what is best in the long-term interests of the consumers of Ontario, even if it isn’t the immediately politically saleable reason.

Mr. Peterson: On the subject of price: I am not one of those people who have ever argued in this House that we should try to cheat the future and I think you know that I’m not one of those people who has ever argued we shouldn’t pay our way today so our children have to pay it for us after the fact. There are certain realities we all face as politicians. Historically, probably the greatest mistake we have made is we haven’t faced up to the current realities, if we could possibly shuck them off on someone who was coming after us. To some extent, that argument enters into the whole energy pricing question.

I am also one of those who say it has reached the tolerance level. The abuse of the small customer, the distribution of rates -- who is expected to carry what load -- is now beyond the tolerance level. I am one who very clearly feels you should have a position on this and there is something you should be doing about it.

One of the reasons Union Gas is doing this is because of the bloody incompetence of the company. They entered into that contract for synthetic gas with Polysar and they’re taking a $10 million a year loss on that. They are trying to extricate themselves from that by shipping it down to the United States and they’re having some regulatory problems doing it. I hope they can get out of it.

What we have with a monopoly, unless we look at it very severely, is the consumer in the province pays the price for that management incompetency, not the company. Who should pay the price? The shareholders, the management? They’ve rolled a couple of presidents over that particular issue and I assume the mandate of the new president is to clean that up and try to get out of it. I hope he does.

At the same time, when they come pleading for cash to increase their price by 42 cents for administrative costs and for distribution costs, one of the arguments implicit therein, although they don’t use it overtly, is because of this management mistake of some three, four or five years ago, whenever it was. I can’t argue and I don’t think you can in conscience argue this is a burden which should be fairly carried by the consumer in a monopoly situation.

When one has a monopoly in a province like ours, one has some very grave responsibilities. Obviously, we don’t trust them to exercise their responsibilities well or we wouldn’t regulate them. Therefore, you have the whip hand. The energy board reports to the government and the government puts members on the energy board and makes sure they are being fair.

I am one who very much dislikes the attitude of the provincial Minister of Energy, who completely washes his hands of these things when it is convenient. One gets the impression very clearly that when there is something you can do about it, you opt out and say that’s the Ontario Energy Board’s responsibility. When there is something they know they can’t influence, at least very much

-- for example, the hearings of the National Energy Board on whatever -- you feel quite free to criticize, complain, carp and bellyache, but you don’t do that with something over which you do have jurisdiction. If they are concerned about what they’re doing at that level, surely when they have the power, one, they should have a position and, two, make that position very strongly felt.

I can tell you very sincerely, if and when we ever have an opportunity to change government in this province -- and that’s not all that unlikely a prospect, don’t kid yourself -- the rate structures of Union Gas and of Ontario Hydro are going to be very close to the top of the agenda for legislative action. It’s historically wrong and it encourages consumption. Any rate structure should not encourage consumption, but the rate structure, as it is presently administered, does encourage consumption because it diminishes with usage. There is a regressive rate. The more you use, the less you pay for both of them. That is completely 100 per cent backwards in our opinion.

I’m happy my colleague the member for Halton-Burlington (Mr. Reed) is here today because he and I have discussed this at great length. He has yapped about this until he was blue in the face. I talked about this at great length when I was energy critic in this province. We will continue to talk about it because it is unfair and wrong.

When you say, “Quite obviously the object of energy pricing is to discourage consumption,” I can tell you, if you believe it, you’re not following it. As Treasurer, I would like to see you use your good offices to change those kinds of things. If you look at it, I know you’ll agree with it. We all recognize that over the long term, energy prices are going to go up. Obviously I would like them to go up as slowly as possible. Then we can always get Claire Hoy running around saying, “I want to see world prices.” I can tell you that’s nonsense. I can tell you there is the inevitability that I, my colleague and my leader recognize, and we have been pleading since 1976 to do something now.

Don’t get caught in the trap the federal government got caught in when they brought in wage and price controls. Those came in with a lot of public sympathy at the time, and even had public sympathy for the couple of years they were around with the exception of my friends in the labour movement. But, generally speaking, they were well received. People didn’t know what to do. There was a lot of confusion in the economy and people said, “Gee, with this runaway inflation, let’s buy some time.” They bought time and nothing happened. They might just as well not have had it.

We told you you were slow to move on energy pricing and the whole question of how it impacts on the economy and its insulating our consumers and our industries from the effects thereof. We said that then. We’re saying it now. I can tell you this: we’re going to go through the same guff two years from now.

The energy debate we’re having today is critical to the future of our province and our country from several points of view. The formulas hammered out now on the distribution of those revenues will probably apply in the future. And we’re all looking, whether you or I like it or not, in the not-too-distant future at $40 to $60 for oil. Everyone who is looking ahead says that.

You think we’ve got adjustment problems at $13.75 a barrel -- man, it’s nothing like you will have. You can’t imagine what it’s going to be like. It has been your government’s inability or unwillingness to recognize the inevitable; recognizing it takes tough decisions to do something about it. I can tell you you’ve been far too slow. If you think our industry, our transportation sector and all of the infrastructure in this province is vulnerable to energy pricing now, I can tell you, Mr. Treasurer, two years from now it’s going to be far, far worse. That is why you must, in my judgement, do a couple of things.

One, you must argue until you can’t talk any more; until you’ve got a sore throat; until you get laryngitis, which would be refreshing to us on this side of the House. I hope you don’t for the sake of the argument you’re taking to Ottawa. You cannot let one penny of this increase, whatever it is, go to just fuelling government revenues that go into consolidated revenues. It must be all deployed effectively back into the economy for a myriad of reasons.

It must go back into the economy to insulate the low-income people in our society from the effects of these high prices. That is very important, but it is just as important to invest now in the capital technology of renewables and conservation to more insulate us from the shocks of what is going to happen in the next five, six, seven, eight, 10 and 20 years. These are realities. It doesn’t take any brains to figure out where this province is going to be at the end of the century.

You’re losing time. You have been losing time. You have had a lot of goodwill from the people of this province. You’ve been in power a long time. Anything you did that was tough along those lines, I have no idea whether our friends in the NDP would support these areas. I can tell you without equivocation those of us in this party would. We have taken the view we are prepared to make contemporary sacrifices for something that is going to protect us in the future, no hesitation about that. We have not seen any leadership or direction in the area of renewables or conservation from this government and I am very serious about it.

[4:00]

What the minister is going to do is let those prices go up in the things he controls. He is going to overbuild the hydro system and I will argue very much that now is the time for a pause in hydro to get the costs in line, to get conservation under control; then he probably won’t need to expand the system in the next little while. He can get a handle on this from my friend from Halton-Burlington, who can speak far more eloquently and expertly on this particular subject.

Rather than build up a system that isn’t going to be necessary in this next little while, the minister is better off to insulate the consumers from some of those excessive prices in the short run. Secondly, he has to do it with hydro prices. I am appalled at the way Union Gas wants to do it and I am also appalled by the way the Treasurer and the Minister of Energy take that “hands off” approach saying, “Well, it is not my responsibility.” It is their responsibility, and in the same breath, they use up all their energy complaining about something that isn’t their responsibility, where they don’t have power.

I am not saying the minister shouldn’t take his argument to Ottawa, he should. I regret only that it was badly put and he didn’t win. Surely, when he has some power he should use it and should be using it in the area of renewables and conservation.

We have been so specific in our criticism; we have been so constructive; I am tired of being constructive. We have given the minister lists of 25-point programs on conservation, on how to conserve with automobiles, in housing, in insulation, in methanol and in biomass. God knows, we have a lot of good ideas and we shouldn’t lose that advantage but as I say, I don’t see anything happening.

That is why I say to the minister he should insist, with all of the might he can summon up -- all five feet four inches of him -- that Mr. Crosbie does not steal any of that money from the windfall increase in oil prices for consolidated revenue. He should make sure it is used for the benefit of our Canadian people and our children. He should make sure also that the money, apart from protecting people on low income, is going to be invested in capital and in renewables, all those kinds of things to protect us in the future.

That is where the minister’s energies have to be and I am concerned that tomorrow night Crosbie is going to steal that money, because he is obsessed with balancing the budget. I think he should be balancing the budget, but there are many other ways he can do it and there are a lot of expenditures in Ottawa that can be cut.

The minister should not let Mr. Crosbie take advantage of this windfall. There will be so much confusion when this price goes up. Nobody will know who is going to get that money. It will be reported in the press, but there will be a lot of confusion. Those who want to will blame the oil companies, some will blame Alberta, but don’t let the federal government sneak up the middle and steal the money just to fuel or to cut down its deficits at the expense of Ontario.

If the minister insists on some kind of policy like that, Ontario probably will be the beneficiary of a lot of investment, technology and research and development, so we can go on and build a new capital base here and explore new kinds of industries.

There is one other thing to say. The minister talks about power at cost and the traditional mandate. Power at cost is just a buzz word. Nobody knows what power at cost means. When one looks at the books of Ontario Hydro, when one looks at their depreciation accounts -- they don’t account like a private company -- when one looks at the surplus at the end of the year, the minister can’t tell me it is power at cost because they do run up reserves. It is a judgement call.

I am not saying they should not store up some little surpluses here and there in order to keep their borrowings down, but what I would say is that the mandate of Ontario Hydro should change, not just to respond to the demand as they have done over the past 50 years. They have a major role in influencing demand and apart from running these little advertising campaigns, the most important way we could do it, in my judgement, is with pricing. That is where they have been left sadly far behind the rest of the country.

I just want to ask the minister one question before I move on to something else. Are you or are you not going to take a position on retail hydro pricing, bulk hydro pricing and gas pricing? Does the Treasurer have any information about what it will do to the economy, and what is your position on it?

Hon. F. S. Miller: I have dealt not with specific rates as Treasurer, but upon the macro-economic effects. I have left rates to my colleague the Minister of Energy to deal with. I am kept informed by him and I listened to some of his discussions this week.

I suspect you will be getting a report from the Ontario Energy Board this week. I will enunciate more clearly. There is a major report I thought was due before too long, giving some advice. However, the energy critic would be able to answer better than I can.

Mr. J. Reed: It has been forthcoming for some time.

Hon. F. S. Miller: I believe there is a due process for it once it comes in and instead of me prejudicing the results I would rather see the process followed.

Mr. J. Reed: I am just saying nicely that it is late.

Mr. Peterson: I am just trying to work this out in terms of time allocation. I gather Friday is our last day, is that right? And whatever time is left, we will just agree that the estimates are finished. I want to let my friend from Nickel Belt perform today so I will save some stuff for Friday.

On this whole equalization question -- we dealt with it in my opening remarks and you responded briefly -- I have a tough time knowing exactly where you are sitting right now. I gather your last comment is, “Well, if we can’t get satisfaction any other way, we may press for our entitlement under equalization.” If I am putting words in your mouth, please correct me. You feel it is a little bit immoral in the sense it is not in the spirit of the Fiscal Arrangements Act and you feel there are better ways to redistribute the windfall oil profits coming to the principal producing provinces. You feel the resource revenues should essentially be taken out of the current equalization formula. If I am not being fair, I want you to correct me on this.

Hon. F. S. Miller: Everything up to that point has been reasonable. On that last point I don’t recall saying --

Mr. Peterson: I could be misinterpreting. I was under the impression you wanted resource revenues treated separately and redistributed through other mechanisms, not through equalization payments. Is that it?

Hon. F. S. Miller: Mr. Chairman, I thought I had offered at some length the opinion the formula of the 29 factors currently used in computing the entitlement of a province under the equalization factors was designed at a time when oil revenues were not as imbalanced as they currently are and therefore, since it increased the payment obligations of the federal government but did not increase its revenue sources, I considered it was putting an undue strain on the federal treasury until it had some source of revenue to counterbalance it.

Second, the money flows no longer necessarily reflected the needs of the receiving provinces because of the change in oil revenues out west. Therefore, at the very least, the formula should be restructured without becoming specific. I did point out there are two caps in the system, the 50 per cent of oil revenues and the one third of total payments from the resource base.

Mr. Peterson: On that subject and as you now know -- you didn’t know at the time -- Bill C-26 has not been passed. You have intimated it is going to be introduced and applied retroactively. Who told you that?

Hon. F. S. Miller: I understood in Ottawa.

Mr. Peterson: When are you expecting it will be introduced in the federal House?

Hon. F. S. Miller: We may learn tomorrow night in the budget.

Mr. Peterson: Are you going to militate against that to protect your own options? You see, I want to know what in hell is your position. What are you going to take --

Mr. Deputy Chairman: The member will watch his language, please.

Mr. Peterson: Excuse me, Mr. Chairman. Good Lord, I know you have never heard that before.

Mr. Deputy Chairman: No, I have never heard it, not in this chair.

Mr. Peterson: I would like to know, what is your position on this redistribution of the oil wealth? How would you restructure? I want to know how you relate that to equalization.

I would say to the Treasurer that in the absence of some firm agreement that I assume has to come up either at a first ministers’ meeting or a meeting of the ministers of finance of this country, that when he puts some new formula to those esteemed gentlemen and tries to sell it to them, he is giving away his trump card if he allows Bill C-26 or its successor to be passed.

It can be stopped by working very hard at making a terrible fuss. If the Treasurer can make a fuss about oil prices, he can sure make a fuss about this one. He gets all those 58 Tories that he and Bill Davis helped elect and he says: “We will not tolerate this. Ontario’s getting it 16 ways, all the way to Sunday.”

Hon. F. S. Miller: I thought you were working for them.

Mr. Peterson: Working for whom?

Hon. F. S. Miller: Those 58. In fact you were working for a couple who didn’t make it.

Mr. Peterson: If the Treasurer asks me did I shed a lot of tears over it, my response in all honesty would be, no, I did not. I did shed a great number of tears for some of the very esteemed Liberals who went down in the last election.

Mr. Laughren: Name one.

Mr. Peterson: I refer principally to the candidate in Willowdale, one James Peterson, who has brought a great deal of prestige and credibility to the Liberal Party ticket. However, that’s another story.

This is a most serious issue we are addressing now and I gather what has happened is the Treasurer’s education was so inadequate in this area that he has tried to do some catch-up in the last month or so since this issue has been brought out in public.

What is the Treasurer’s position? How does he figure that money should be redistributed? How does he want the Fiscal Arrangements Act redone? How does he want those 29 categories treated? What does he want done with resource revenue? Is he in favour of Bill C-26 or its successor, or is he going to fight it? He should be very specific because I can assure him that my friend from Nickel Belt is a very erudite economist. He and I understand everything he is going to say, so he should not worry about being complex.

Hon. F. S. Miller: I thought that was unparliamentary language he was using a second ago. I thought it had something to do with the human rights bill.

Let me try to disentangle two things I thought only the honourable member’s leader had tangled. I have listened to him argue that we have tried to confuse equalization payments and the redistribution of oil revenues since the day the paper came out and I keep trying to tell him they are two separate things.

There is no question that the formula as it now stands is influenced by oil pricing. No argument.

We are totally against the continuation of that formula as it is now designed, because --

Mr. Peterson: What are you suggesting in its place?

Hon. F. S. Miller: -- it’s not due to be changed, I think, until 1981 or 1982. We have asked for and hoped that discussions will go on towards making it fit its original purpose. That was to provide provinces who have the fiscal inability at the provincial tax level to raise the moneys they need to provide basic services. Ontario is not in that position.

Mr. Peterson: When is this going to be discussed and what is your position?

Hon. F. S. Miller: All right. I have asked that it be discussed at a ministers of finance meeting very specifically. I hope it will be. I have talked already to the federal Minister of Finance about my concern.

Mr. Laughren: It’s 1982, by the way.

Hon. F. S. Miller: I thought it was 1982. Yes, it’s somewhere down the line before it changes. The fact remains that it may not change quickly enough. It is giving whoever is finance minister real problems in the meantime. It has nothing to do with the money Alberta is getting.

[4:15]

Let me try to see if I could somehow sketch what happens in my mind when the price of oil goes up. It goes up, say, $4 a barrel. A small part of that money, to be determined, I assume, by the Minister of Finance of Ottawa, will go to the producer. Some part of it -- currently 10 per cent -- goes to the federal government. To date 45 per cent on average of revenues have flowed to the producers -- not of profits but of revenues.

Mr. Peterson: Are you leaking the federal budget?

Hon. F. S. Miller: I have no idea what’s in that budget. I could sit here all day and I wouldn’t be able to leak something I know nothing about.

Do you agree with 45-45-10? All right. It varies from company to company and from kind of oil to kind of oil, old wells and new wells, Syncrude to non-Syncrude, and so on. But if I generalize and say 45-45-10, I am not far off. The federal government currently gets 10 cents out of every dollar increase, unless it changes the rules in the budget or some .other way.

That doesn’t give it much money. At the same time, when the price of oil goes up, the formula it now uses requires it to pay out more money. It has no source for that money. It pays it out to the have-not provinces. By definition, we have fallen into that category without being one, because under our entitlement, because of oil revenues, they now owe us about $18 per capita per year. On sum total for the last three years, that comes to about $470 million.

When the federal government raises the price of oil, 45 cents flow to Alberta and go into its treasury and 10 cents flow into the federal treasury. Then Ottawa is committed to a payout under the equalization program. The 10 cents flowing in doesn’t help them a great deal because they already have massive deficits, in the order of 25 per cent of the total budget. Therefore, they are faced with an equalization formula that penalizes their treasury each time they raise the price of oil. Agreed?

When it comes to giving money to Ontario to provide basic government services that poor provinces can’t afford, I hope you would agree the formula isn’t doing what it was designed to do. Do you agree with that?

Mr. Peterson: No. I happen to be a lawyer and you are talking about all the moral implications of this act. Isn’t Rendell Dick a lawyer?

Hon. F. S. Miller: I never knew you were a lawyer.

Mr. Peterson: Yes, not a very good one.

Mr. T. P. Reid: You have got a lot of company, in that case.

Mr. Peterson: In fairness, I am about as good a lawyer as you are an engineer, so we are not talking with a high degree of expertise.

Hon. F. S. Miller: I won’t even ask you what makes you a poor lawyer.

Mr. Peterson: I admitted that at the beginning.

Mr. T. P. Reid: Go one step further and say you are as good or bad a lawyer as he is a Treasurer.

Mr. Peterson: Let me say you are bringing this new moral judgement to this act.

Hon. F. S. Miller: It is not a moral judgement.

Mr. Peterson: Sure it is, because you have a legal entitlement. That’s my whole point. If you didn’t have a legal entitlement, Bill C-26 would not be necessary. It’s to clean up the loophole, for want of a better word.

Hon. F. S. Miller: All right.

Mr. Peterson: I am saying you have a legal entitlement and I am saying there is a good chance the resource revenues you want retransferred, albeit under another mechanism, which I agree with you is more fair, will not be. Therefore, I am saying to you the only weapon you have today legally, let alone morally, is a positive entitlement under equalization. You are going to get up and say, “It is just going to make the federal deficit bigger, and 45 per cent of all that comes out of our taxes.” You are still a net winner of 55 or 60 or 65 per cent.

Secondly, I say very frankly when did it ever become your responsibility to balance the federal budget? I admit they have problems. Is it because your friends were just elected you feel you have to balance their budget? I know you don’t share all this doom and gloom stuff about the province of Ontario being booted into the ground, but surely there are enough indices around to say that we are, relatively speaking, in a downward slide and it needs some corrective action.

I’m saying there is a million bucks -- half a billion, $470 million -- that could be used to our purposes. I am not saying you should use it just to get rid of our deficit. I am saying there are a lot of other constructive capital investment things that could be done. I am taking this ahead a little more than I wanted to.

You were saying: “Really, morally, we are not entitled to this because our average per capita income is above the national average. So we are really not entitled to it.” That really was not the intention of the bill, according to a lot of economists I read. The intention of that bill was to equalize provincial revenues. You have taken a different attack on the bill.

I still do not understand. Is it just because you sit there in your cabinet meetings and you feel badly? You really feel, “Gee, that wasn’t the intention of the bill so therefore we had better not collect it”? You know that legally you are entitled to it.

You made me angry in the middle of it. You don’t often do that but you made me angry because you are so wrong. Therefore, I had to stand up and correct you. You carry on.

Hon. F. S. Miller: “Wrong” is a subjective opinion. We believe that the federal government -- what, a year and a half ago -- gave notice that it agreed the formula was not reflecting the intent of the legislation any more. It stated it was going to make certain changes in the bill. You can quickly point out that one day I was thinking, in error, that the bill had passed, non-lawyer that I am.

Mr. Laughren: That is the only good thing about you, Frank.

Hon. F. S. Miller: You touched the Chairman’s heart when you came up with that one.

Mr. Deputy Chairman: You woke me up.

Hon. F. S. Miller: We were told the legislation on entitlement to which we legally had the right to ask would be changed retroactively. On that much I agree with you; legally we have the right to call upon it.

I say it is foolish to demand something that is going to be taken away from you in the next breath. It is something like sending an old age pension cheque out to somebody, letting them spend it and then coming back with -- you have seen this happen in your riding -- “in error sent,” or “calculations based upon last year’s income.”

Mr. Peterson: That couldn’t be a more irrelevant analogy.

Hon. F. S. Miller: No, because you end up having to pay it back later at a time which may be totally --

Mr. Peterson: That’s not true.

Hon. F. S. Miller: The feds make these saw-offs. A note that I was just given by staff says the federal government is already paying on the basis of Bill C-26, by the way.

Mr. Peterson: The new crown leases bill?

Hon. F. S. Miller: Yes. The crown leases are out, Ontario is excluded and there’s a three-year averaging provision for Saskatchewan.

The other half of this argument is: okay, we have agreed that equalization formula was designed for a certain purpose. You can have the minor difference in opinion that you and I had about whether it was to average provincial incomes or whether it was to help provinces with less-than-normal incomes.

Mr. Peterson: Provincial revenues.

Hon. F. S. Miller: Provincial revenues. The fact is it came to a government at the expense of the people of Ontario. I would be grateful to get that money because it would appear to come from another governmental level, without me raising it. It is like increasing municipal grants. We still take them out of the people of Ontario one way or another.

The real argument was the one you touched upon earlier: the 45 cents out of each dollar that currently go in as royalty, or whatever else it may be, to the province of Alberta. In my opinion the money should be used not just for the benefit of the people of Alberta but for the benefit of all Canadians. Either the federal government has to increase its 10 per cent share, or some recycling mechanism such as we proposed in our paper needs to be adopted. The recycling mechanisms we have proposed in our paper were, of course, to protect the consumer first and then to see money funnelled back into the reinvestment for security of supply as a capability to use it wisely was there.

So we say: “Fine, leave the equalization formula out altogether for the time being. We have to dwell upon the redistribution of that revenue for Canadians’ sake.” If you do that adequately, you may not have some of the problems the equalization formula is trying to address and we’d be in a better position to know what it was doing.

If the federal government says there’s no way they can attach any part of the 45 cents, there’s no way they’re going to reduce any part of that 45 cents on the incremental prices of oil, then I think we have a problem. That problem may require us to go back to the federal government and say: “Fine, since Ontario is not going to be given” -- and not loaned, by the way -- “any part of the 45 cents Alberta is getting, we will now look for other mechanisms to help the Ontario treasury.”

I wouldn’t be at all surprised if at that point we started looking at the basic purpose and design of the present mechanism, the equalization payments, in place and start saying they have to achieve a different purpose -- that is, help us get some of our oil revenue back. Surely, we should deal with one problem at a time.

Mr. Peterson: If this doesn’t work out we will look at a new mechanism. We might get angry and, as the minister said, if we don’t get treated fairly, we may demand our equalization.

You have to recognize what’s going on in this country. I had a conversation with a very important man in your government. I’m not going to name him because this was at a cocktail party. I happen to have a great deal of respect for this particular senior person in your government, who is a civil servant. We both just chatted off the record at this cocktail party.

Mr. Laughren: He’s going to put it on the record.

Mr. Peterson: No, I’m not.

He said: “What is going on right now is very difficult for the province of Ontario. When we try to make a deal with the federal government there is a very definite bias away from Ontario. We’re really having a tough time getting our fair share out.” He’s talking about various little programs.

I don’t want to be specific or even name the chap because I don’t want to jeopardize these negotiations, but I thought that statement was a significant one. There used to be a lot of feeling that there was real bias in all the federal programs in favour of Quebec. A disproportionate share of the money was going there from Department of Regional Economic Expansion grants or whatever you want to talk about, or local initiative programs or federal/provincial programs of any type. I don’t know if that’s true or not true, but there was that feeling.

There’s a feeling now -- certainly, as expressed by this particular person -- that Ontario is really going to have to fight for its rights. There’s a new attitude that Ontario has been living too high off the hog for too long and we’re going to sort of redirect some of these moneys west; that we’re going to recognize some of the new realities; that it would be a very tough time.

I’m trying to impress upon the minister he was talking about a bureaucratic attitude and probably a political attitude with this change in the composition of the federal House and the people who run it. It may just be a very real stumbling block the minister is going to have to face politically, legislatively, as well as bureaucratically. If you’re facing that kind of a mentality -- and let’s just say for the sake of argument it’s a subtle thing, but it’s settling in there -- you may have a real difficulty trying to impress your new arguments on the government of the day. There may not be a lot of sympathy for you there.

Let’s not forget, there aren’t many important ministers from Ontario at this time. None of the major shooters are from here. There are a couple of cabinet ministers from here. You may not have the pipelines in. There seems to be a pretty serious disagreement between the Prime Minister and the Premier at this time. If one accepts what one reads in the press, there’s pretty bad blood between Mr. Lougheed and Mr. Davis -- I have no idea whether that’s true or not; you have a better idea than I have. I’m just saying you may have a much tougher time getting what you feel is your fair share than you have revealed so far.

[4:30]

My suggestion to you is this: Don’t give up your legal entitlement. It might be the only chance you have to get a fairer redistribution of some of these moneys. Obviously, I would like to see these formulae redrawn in a fairer, more just and equitable way. I’m not particularly optimistic, if you accept my former points, that it is going to be easy or that you even have that much clout.

The underlying theme of most of the commentators who were looking at the most recent first ministers’ conference and during his last three or four months of discussion on the federal level was that Ontario has lost clout, that there is no longer a Darcy McKeough, who used to be the second most important financial man in this country. When he spoke, they listened.

The Premier doesn’t seem to have a lot of clout with the Prime Minister at this time. It’s a function of players. The Treasurer probably would have done a lot better with Trudeau because he could have fought him up-front. Now he has to justify these guys. He is caught in a very difficult position. He semi-apologizes and semi-fights with them and it’s made his position a most difficult one. I have some sympathy for that.

But generally speaking I am concerned about this lack of clout that appears to exist. I think if the Treasurer loses his entitlement, if he acquiesces in the face of the successor to Bill C-26 and then he goes and says, “Well, boys, let’s redistribute this money,” why won’t Mr. Lougheed and Mr. Bennett and -- who’s that socialist out there? -- Mr. Blakeney, all say, “Why should we redistribute it?” On the same arguments they have made before they may just say: “You’ve had it pretty good for so long, you’re not entitled to equalization or any redistribution. You’ve got the industrial base; you’re not entitled to it.”

I am concerned when I see what I perceive to be this lack of influence on several levels -- politically, legislatively, bureaucratically. I think the Treasurer would be sadly mistaken to give up any levers he has, albeit they aren’t very substantial right now. At least he has this legal lever of equalization.

The Treasurer must not let that slip through his fingers or get out of his hands. He can fight it. He can fight it politically. He should go to the people of Ontario; we can arrange for him to have an election over the issue, if he wants to. He should go and say, “We are getting abused by the federal government.” He shouldn’t feel he has to apologize to them. The consumers in Ontario have a right to that money and we’d better send Joe Clark a message.

If the Treasurer won’t do it, we will do it. I am concerned that the Treasurer can’t fight the fair fight. He is sort of semi-apologizing for them. The Treasurer should not give up the legal right to that money until he has something to his satisfaction and the satisfaction of this province in its place. I feel very strongly about that.

I think that whole issue has been extremely poorly handled by the government. I am one who is not too proud to go and say that we’re entitled to it. The world has changed and legally we’re entitled to it and we should take it right now. It’s that simple.

Mr. Speaker, my little friend from Nickel Belt has been doing a lot of yapping. He’s sort of getting all charged up. I gather he would like some time. I will continue with the Treasurer on Friday because I have several other issues I would like to discuss.

It’s been a pleasure doing business with the Treasurer. We will be back to him on Friday. If he would like to respond, I would be delighted.

Mr. Cooke: I want to ask a few questions of the Treasurer, the economic strategist for the province.

First of all, I want to say I was quite amazed by his colleague’s admission this afternoon that we could have emergency debates on just about every aspect of the economy because they’re all in as disastrous a condition as the auto industry. That was quite an admission this afternoon. I’ll certainly want to make duplicate copies of this afternoon’s Hansard.

I’m also very disappointed in the Liberal Party because they have representatives in my area, in Windsor, and they were not very supportive, to say the least, of an emergency debate this afternoon.

Mr. Peterson: If you have so much integrity, why didn’t you challenge the Speaker’s ruling?

Mr. Cooke: If the member was concerned, he could have supported our debate. But the members for Essex South (Mr. Mancini), Essex North (Mr. Ruston) and Windsor-Walkerville (Mr. B. Newman) weren’t present.

Mr. Peterson: Why didn’t you stand up and challenge the Speaker?

Mr. Cooke: I think the member’s House leader’s words speak for themselves. Just reread them or have someone read them to you.

I want to ask the Treasurer what kind of economic planning or what kind of visions does he have for this province, when back in May of this year his Minister of Industry and Tourism (Mr. Crossman) made a statement in this Legislature in answer to my questions. I’ll quote the whole thing. He said: “V-8 engines are used in popular vans and trucks as well as larger passenger cars. Therefore, V-8 engines are believed to have a good future, as evidenced by Chrysler’s large investment in Windsor’s plant in 1978.”

That statement was made by the Minister of Industry and Tourism in May 1979. Now we know that kind of planning was all screwy and V-8 engines are not in demand. As a result, we have extremely high unemployment in the Windsor area. What kind of planning do you have? Do you just simply take the opinions of the leaders of the corporations in this province? Do you do some kind of economic planning of your own? What I’d like to know from the Treasurer is what steps he is taking, along with the Minister of Industry and Tourism, to make sure we do get our fair share of small car production in this province.

The Minister of Industry and Tourism made a statement this afternoon. He continues to talk about the investments that Ford and GM are making in this province. The fact is GM plans to spend $38 million by 1985. To date, they have indicated they’re spending something in the neighbourhood of $2 billion in Ontario, but a lot of that $2 billion was announced back in 1977. If we’re to get our fair share, we should be getting over $3 billion worth of investment from General Motors. The same goes with Ford. We’re not getting our fair share of investment from the Ford Motor Company. I’d like to know what the Treasurer is doing, in conjunction with the Minister of Industry and Tourism, to make sure we get our fair share of small-car production.

Hon. F. S. Miller: The member took the words of the Minister of Industry and Tourism to mean there were a lot of disasters on the horizon. That’s understandable because his party has made a habit of seeing disaster in every statement issued by everybody since time began.

The hypocrisy of demanding a debate on the automotive industry and demanding government intervention, having been one of those to stand up and say we should not help Ford locate in Windsor, really astounds me. Your party was absolutely and totally opposed to the government of Ontario assisting Ford to locate in Windsor.

Mr. Warner: You’re on thin ice. You’re better in Disney World.

Hon. F. S. Miller: Go back to your seat. Mr. Chairman, he is out of his place. The one place he’s confident is in the classroom.

Mr. Deputy Chairman: You’re right. If the member for Scarborough-Ellesmere wishes to make remarks, he should make them from his own seat.

Hon. F. S. Miller: Do we do economic planning and are things as bad as you sometimes say? Of course we do economic planning. Economic planning involves the best appraisal of the facts before you and their extrapolation into the future. You do economic hindsight and that’s got to be one of the safest things in the world to do. Many a good economist looks pretty poor in hindsight. Let’s look at the record.

The third quarter national accounts information just came out. Canada had a 5.1 per cent annual rate of growth on real terms in that third quarter. That’s a heck of a high rate. That’s following the quarter before it, which saw a 2.9 per cent decline. This is the quarter ending September 30. Inflation moderated during that quarter. We saw investment -- and to me, that is the measure of what’s going to happen to future jobs -- at a robust 25.4 per cent seasonally adjusted annual rate, 18 per cent higher than it was about 18 months ago.

When we started the year we said there would be about $10 billion invested in plant and machinery and in capital investment in 1979. I understand it is up to around $14 billion to $15 billion at present. Profits of companies increased, meaning my revenues will increase. For a change, housing did a little better.

Both exports and imports improved in terms of volumes, if improved means higher imports. I don’t know that I would read that. Our current account deficit in that third quarter, on an annual rate, dropped to $4.6 billion from $5.9 billion in the previous quarter.

Mr. Laughren: That will be the yearly figure.

Hon. F. S. Miller: No, I quite agree. I am just talking about the rate of that quarter. Take-home incomes, in spite of a lot of comments that they were dropping dramatically, stayed level during that quarter. That is not good, but it is not as dramatic as we have been led to believe.

The third quarter was a surprisingly strong one. I don’t mean the fourth quarter is going to look good by comparison, but when I started this year off I stood up and I predicted somewhere around 130,000 to 133,000 jobs would be created in Ontario in my budget and I heard then how wrong I was, how the world was going to fall apart. I was wrong; it was 170,000 at last count. Better than I would have ever dreamed.

Mr. Laughren: You were wrong. What is your prediction about 1980? Will you tell us about that?

Hon. F. S. Miller: I don’t know yet. I want to see the federal budget before I come in on that one. The honourable member knows as well as I do after the budget I will have to make my predictions and he knows as well as I do that until I get that information I would be foolish to make those predictions because what happens in 1980 surely will be affected by Mr. Crosbie’s budget. I have given Mr. Crosbie a few pieces of advice.

Mr. Chairman, through the Employment Development Fund and through other measures in the province I would say we have taken steps to increase investment in so far as we can in this province, as opposed to foreign destinations. A great deal of that is going into the Windsor area and will continue to go into the Windsor area, all being well. That depends to some degree upon the survival of Chrysler because Chrysler is vital to your area.

I have great confidence that while you’re going through a cyclical downturn in the auto industry as you went through a cyclical downturn in the metals industry when I was minister, you will shortly see an improvement.

Mr. Cooke: Mr. Chairman, it should be pointed out to the provincial Treasurer that when we debated the bill to give the $28 million to Ford we indicated quite clearly that, yes, we were in favour of the jobs, but the ends do not justify the means. Those jobs were deserved in Windsor through the auto pact. We shouldn’t have to bribe a company to live up to the auto pact. If you advocate that is how you are going to enforce the Auto Pact, then I think this situation is in an even sadder state of affairs than what I had imagined.

We know what kind of investment these corporations are willing to give under the auto pact. As late as April 1979 I had given to me documents from Chrysler management that indicated this company that you and your colleagues have said all along was interested in investing in Canada and Ontario for small car production, as late as April 1979 was planning to continue production of the 360 V-8 engine until 1985. The only thing that has changed that plan for Chrysler is not any great concern for the community in Windsor, or for the auto workers in Local 444. The only thing that has changed Chrysler’s mind now is because they are in such a desperate situation and need government handouts and the only way they can get that money is to live to certain conditions.

One of the things that disappoints me about you and your colleague the Minister of industry and Tourism is that you people have been absolutely quiet on the problem at Chrysler. I would like to know what you, as the minister of finance for this province, are saying to the federal government about Chrysler and why you are not putting public pressure on them to say right now, “We accept in principle the idea of assisting Chrysler in maintaining those 13,000 jobs in Windsor.” But we haven’t heard that. What has your government been saying about TAB benefits for unemployed auto workers?

[4:45]

The Minister of Industry and Tourism wrote me a letter saying he favoured it and then when I asked him a question in the Legislature he didn’t have the guts to say it publicly. He doesn’t have the guts to put the pressure on the federal government and to say that in a very open and vocal way. It is that kind of non-leadership that makes the people in my party and myself and the people in Windsor frustrated and angry at this government.

I would like to ask a specific question. An article in the Financial Post indicated part of the Chrysler proposal was that there will be an expansion of jobs, but the expansion of jobs and the expansion of production are being encouraged to take place in Quebec. I would like to know if the minister knows anything about that and if he favours it. I don’t want to get into a debate on where the jobs should go, but you know as well as I do that right now in Windsor there is 17 per cent unemployment when you consider the temporary layoffs.

Chrysler has existed in Windsor for many, many years but I have the feeling that those 6,000 jobs that were mentioned were replacement jobs -- as were so many of those other new jobs you have talked about in the past. A good example of that is the jobs at the Ford V-6 engine plant you people contributed to. I think you will find the $28 million will not have created new jobs; they will simply have sustained the present work force.

I would like to know if you are aware of anything of this proposal to create jobs in Quebec, what your position is on it and whether you will say very strongly that the first and foremost aspect of any assistance to Chrysler should be the preservation in Windsor of each and every job that now exists in Windsor. Then we can talk about new jobs.

Hon. F. S. Miller: I have heard no more than the rumours you have. I am totally opposed to any federal government assistance to redirect Chrysler out of Windsor and into Quebec. It is as simple as that.

I think the law of the marketplace which says southwestern Ontario is the logical location for the great bulk of the automotive parts and assembly industry in Canada pertains and we should see that happen.

I want to point out one thing. It’s great again, to say you have your hands on a company document that says the 360 V-8 will be needed until such and such a time. I don’t know whether it will be or won’t. I just know that in a world where gasoline shortages can so radically alter the demands of car buyers, as they did this year in the States, it is extremely difficult for any orderly planning to take place.

Let’s go back a few years. General Motors has an assembly plant at Ste. Therese, Quebec. I don’t know how long it has been there. I would say it was built somewhere in the 1960s. As I recall, that plant started out assembling full-size Pontiacs. Maybe you are aware of that. Then somewhere around the time the fuel crisis hit in 1974 and the world price started to skyrocket, there was a sudden US gasoline shortage, as I recall, and a sudden switch away from the big car. Do you remember that, around 1974?

I believe it was around then that General Motors brought out the Chevette. I can’t recall which year it was -- 1975-76? I was in the business and I would not have lost that kind of date. They very quickly turned that plant over from making Pontiacs and Chevs to Chevettes. For a short time the Chevette and Acadian were sales sensations.

Mr. Nixon: You never had any of them on your lot.

Hon. F. S. Miller: When they started selling Chevettes I ordered Cadillacs. That is one of the reasons why I always succeeded.

In any case, I recall the General Motors Chevrolet division manager in the United States getting great marks in one of the automotive magazines for having this tremendous foresight to know just when to bring the little car into the marketplace.

It was the fastest-selling new car ever brought in. The production lines couldn’t keep up. They were going to have to add new plants. They converted the whole plant at Ste. Therese to meet the Canadian and the northeastern American demand. Then wham, the shortages of oil in the States ended; they started having normal supplies. All of a sudden the buying habits of the Americans went back to the mid-size and full-size car. All of a sudden GM dealers had Chevettes and Acadians coming out of their ears; they couldn’t give them away. They put packages out to sell them. They had special sales. They converted the Ste. Therese plant back to full-size cars because that’s what was selling. Does the honourable member remember that sequence?

We now see the same kind of sequence going on and the companies have, I am thankful to say, in most cases very real ability to adapt their plants. We have seen Ford switch the Talbotville plant from Zephyr to Zephyr plus Pinto this year. Surely, no matter what is said, Pinto is a small car. I would put it in the subcompact range, would the member not? It’s being added to Canadian production.

I have seen Chrysler drop the Newport series in Windsor; I guess they put them back in the States. That was the only model in which they showed an increase in sales in last year. They have brought in a much lighter-weight product this year in the Cordoba/Mirada line and put those cars into Windsor. I think the member will agree, did they not? Did they not? Those cars have not been too well received yet; I have a son selling Chrysler -- that is my contribution to Windsor.

Does the member know why those cars are not selling? Because of the psychology abroad that the company won’t survive. One of the worst things we as politicians do is create that psychology by talking it up so the papers write it, so we are seeing the slump from 18 to 11 to whatever it’s going down to for Chrysler. I feel a bit badly about that because the member talks about our responsibility. Our responsibility is to help, but not create in the public’s mind the panic that aggravates a problem already existing for a corporation.

Mr. Cooke: Mr. Chairman, perhaps we could get around that psychology if the Treasurer of this province and the Minister of Industry and Tourism could convince their Conservative friends in Ottawa to have enough guts to make their proposals and to support the Chrysler proposals and put pressure on Congress --

Hon. F. S. Miller: At any cost? At any cost?

Mr. Cooke: -- and put pressure on Congress to accept it in principle, obviously the basic principle being that the American government also has to provide some kind of support.

Hon. F. S. Miller: Let me just point out one thing. Chrysler Canada I am told made a profit last year, except for the variation in foreign exchange. Correct? The fact remains it has had a very loyal dealer network compared to Chrysler US. I think that is correct. It has had a relatively good and stable market. I checked; 66.5 per cent of all the cars purchased by the province of Ontario last year were Chrysler products, did the member know that?

Mr. Breaugh: No wonder you are never going to win Oshawa again.

Hon. F. S. Miller: Those were from tenders, my friend, tenders, and the member wouldn’t have us take the high tender.

It’s just an interesting statistic. Chrysler was going after fleet business, the member knows that. It was taking the taxi fleets, it was taking the government fleets, it was taking the Bell Canada fleets, it was taking Hydro’s fleets. I don’t blame them. I am just pointing out that those are some interesting statistics. But the member does know, I am sure, that anything Canada does to save Chrysler Canada would be blowing in the wind if the American government doesn’t take some action and the American government I understand has turned a $1.5 billion guarantee down to $1.25 billion, put in a series of conditions such as a three-year wage freeze and a demand that the States become involved in active support of such things as purchase of product so the company would have some support other than from the federal agency.

I tell you those are going to be very difficult measures, but there is absolutely no use saving Chrysler Canada if the parent Chrysler US goes under. Obviously then, Mr. de Cotret, or whoever is charged with the decision in Ottawa will have to await a decision of the US government. Pray to God it’s not too late because I want to see that company saved.

Mr. Cooke: The minister didn’t hear what I said. What I said was that Mr. de Cotret could accept in principle the idea of aid to Chrysler. One of the conditions obviously would be that the American government also would have to come through. Mr. de Cotret could do that and it would add pressure on Congress in order to pass a reasonable bill. At this point it’s only the Senate bill that’s unacceptable. The bill from the House of Representatives, I understand, is a reasonably acceptable one.

I want to raise three other quick items. First of all, the minister didn’t respond to the question of TAB for displaced auto workers. I think the minister must recognize how very important that is because even if Chrysler does get assistance, it’s going to be to 1983 to 1985 before the retooling takes place and -- maybe I could wait until the minister --

Hon. F. S. Miller: I am listening.

Mr. Cooke: This is very important so I hope the minister is listening. I haven’t had a straight answer from anyone else in his government. We are talking about 17 per cent unemployment in Windsor. We are talking about thousands of people. I want to know what is his government’s position on TAB and whether he is willing to go to the federal government and speak out publicly to put pressure on it on behalf of automobile workers, not just in Windsor, but automobile workers in this province.

Second, I would like to know what his position is on a job-creation program for Windsor, which is now the city with the highest unemployment in the entire country. I think it’s essential that the government get in there and speak with local officials and design a program to meet the needs of that community before the problems of unemployment filter right down through to the retail and other businesses as they are beginning to now.

Finally, I would like to know what is the minister’s assessment of the result if the government tomorrow imposes the 25 cent tax on gasoline. What effect is that going to have on the automobile industry? Has he done any studies of that? How much more unemployment is going to be created this time by the federal Conservative government?

Hon. F. S. Miller: The question of the excise tax on fuel: can one hypothesize it is going to take place? Right now that’s all we are doing, hypothesizing, because we don’t know if it will take place. A good deal of the argument or the rhetoric that flew around the question of the oil-pricing issue, the quick move to world price, particularly through provinces like Quebec and for many of the theorists who are advising ministers -- not in my ministry, I want to add very quickly -- was that a rapid increase in oil price would cut consumption. I attended a seminar at -- now you are not listening to me, by the way. If you were a student in my class, you would be staying after school with Mr. Samis and you would both have a few lines to write, like “I will listen to teacher.”

Mr. Samis: We both buy used cars.

Hon. F. S. Miller: In any event, at the Ryerson Polytechnical Institute I was listening to an interesting economist deliver a very good lecture on the question of oil pricing. He said it was his opinion that the consumption rate in fuels had an elasticity of about minus 0.1. In other words, for every 10 per cent you increase the price, you had a one per cent drop in consumption.

[5:00]

I have no idea how accurate he is, but if he is accurate, and I sense he is within normal probability or of normal error, I would suggest to you that 23 cents is an awful price to pay for a tiny reduction in consumption. It has to be justified by some other means. It is hitting a consumer today who is pretty well dependent upon the automobile. That is why the reduction is so small. It is hitting him at a time when he can ill afford it because of the number of other measures like high interest rates and at a time when unemployment is higher than we would like to see it. So we would have to argue it is not going to be productive in the economic or conservation sense.

There are many buzz words used. One of the things I have learned always to say is if I don’t know something, admit it. What is TAB?

Mr. Cooke: Transitional assistance benefits, which basically was put in place back when the auto pact came in. We have suggested it, city council suggested it and your Minister of Industry and Tourism has supported it in a letter. It is one of the few positive letters I have ever had from him, so I make sure I don’t lose it. In any case, in a letter he wrote to me very recently he indicated he supported the position of the city council and the UAW that TAB should be reinstituted in order to cover auto workers who have lost their UIC and their supplementary unemployment benefits. As you probably know, Chrysler with its massive unemployment has run out of its SUB fund and the TAB program would bring them up to a reasonable level.

I might point out, in the States the auto workers qualify for TRA, which is Trade Readjustment Allowance. That qualifies their unemployed workers and I believe it covers about 66 per cent of the laid-off auto workers in the States. They are getting $240 a week, which is much better than our workers get. It is to keep them off welfare.

Hon. F. S. Miller: Mr. Chairman, since I am not familiar with the details of the program, I would be very unwise to comment on that, so therefore I would reserve any comment until I check.

Mr. Cooke: Your Minister of Industry and Tourism has supported it and communicated that to city council and to me. He is so bloody serious about it he hasn’t even raised it with the Treasurer of the province.

Mr. Di Santo: Mr. Chairman, I am somehow puzzled by the answer given by the Treasurer. I think there is total confusion on the side of the government as to how to handle the automobile crisis. It is really regrettable for him to state that if there is a crisis it is mostly because politicians are spreading statements that create uncertainty in the automobile industry.

On the other hand, today during question period, the Minister of Industry and Tourism said the auto pact is performing well for Canada. I think he should try to clarify his ideas before giving answers to us and before accusing opposition members of creating an atmosphere of uncertainty. Certainly it isn’t our fault if Chrysler is falling apart. It isn’t our fault if there is a very serious crisis in this sector. When the Treasurer comes to us and tells us Chrysler has good dealerships in Canada and that is the reason for its success on this market, I think he handles the issue from a very narrow point of view that doesn’t reflect the complexity of this industry.

It isn’t good enough for the government of Ontario to say, as the minister said before, “At this point we don’t have any definite answer and we don’t know what Congress will do and we don’t know what Mr. de Cotret will do.”

From last week’s report in the Financial Post comes something very dramatic and most serious. We have a company which wasn’t even able to give acceptable figures to the government. I think the minister read the statements Mr. Craig made that in Canada Chrysler has only 10 people in the accounting department and they were not even able to produce credible figures. They had to ask the people in Detroit to do the work for them. What’s more serious is the fact that Ontario has been completely cut off from negotiations.

I’d like to ask the minister if he doesn’t think it’s the responsibility of this government to make our position clear, because most of Chrysler’s production is located in Ontario. We cannot just wait until Mr. de Cotret decides, or for the decision of the American Congress.

Our question is does the minister have a position, and what is he doing in order to avoid a collapse in the Chrysler situation in Canada and in Ontario? The minister hasn’t been able to answer this question.

Hon. F. S. Miller: Mr. Chairman, it’s fair to ask me any of the questions about any part of the economy, I quite agree. But the honourable member has to understand that the Treasurer doesn’t personally negotiate with every single sector or industry. The Minister of Industry and Tourism has been the minister who has carried out the person-to-person or ministry-to-company discussions; therefore, I am not always current as to what has gone on in a particular discussion. I am certainly aware, in general, of the trend we’re following.

The trend we’ve been following is to await an understanding of what the US government is doing, which in turn will influence what the Canadian government is doing and which in turn will influence what will be necessary for Ontario to do.

There’s a lot of argument in the States whether anything should be done at all, because a lot of people from the States feel that the 400,000-odd people working for that company in the States would not be out of work but would end up, in the main, working for the remaining two major automobile manufacturers. I don’t subscribe to that. I’m simply saying that’s the kind of argument that is being put forward by a number of critics of the American plan.

Anything we do with the workers of Ontario, through either level of government, has to be done with the assurance that the parent company is going to survive. To do it any other way is absolutely ridiculous. You can’t deal with hypotheticals until you see the facts.

Mr. Di Santo: Thank you, Mr. Chairman. I think it’s fair for the Treasurer to say that he’s not involved in specific aspects of the industry; I agree with that. But when we are faced with a major crisis -- and I think the Chrysler crisis is the single most serious problem we have in the Ontario manufacturing sector -- we expect the Treasurer to take leadership. As the person responsible for the economy of the province, surely he is required to give us answers.

I think there should be some conversations at cabinet meetings. When we see that the Minister of Industry and Tourism not only doesn’t understand the problem, but as late as November 17 comes up with the idea of another study on the automobile industry, surely the Treasurer should remind him that in 1978 his ministry did an exhaustive study on the auto pact and came out with the idea we have been propounding for years: that we are not getting a fair share from the auto pact. I think it’s the Treasurer’s responsibility to come in front of us and justify the inability of the government to deal with these important issues.

When we see General Motors is announcing they will spend $2 billion in Canada in retooling, out of $38 billion in the North American market, surely it is the responsibility of the Treasurer to say that is not good enough. If we have one tenth of the North American market, surely we are entitled to have one tenth of the manufacturing in Canada.

The Treasurer should answer us now, when we are talking about the lack of research and development and the lack of skilled jobs developed in Canada. The Treasurer should be able to tell us if we are content with having only jobs and some manufacturing, and therefore to perform a service function or if we want to be able to develop a manufacturing sector which is self-sustaining and is comparable to other countries that produce and buy fewer cars than Canada, but which have flourishing automobile industries.

I want to remind the Treasurer about other companies -- I want to mention some of them. In 1978 BMW, in Germany, produced 311,793 cars and employed 37,581 workers; Peugeot/Citroen produced 1,596,000 cars and employed 190,000 workers; in Canada, in 1978, we bought 1,366,000 cars and we employed only 63,000 workers.

Has the Treasurer asked himself why it is we have this situation in Canada and why we have this situation in the auto pact? If we have in the auto parts industry, during the first 10 months of this year, a deficit of $3,287 million, surely that has a serious impact on the economic performance of Ontario and results in a lot of lost jobs in Ontario. Has the Treasurer ever calculated how many jobs we lose because of the huge deficit in the auto pact? Has the Treasurer ever examined the performance of the auto pact where we went from a deficit of $90 million in 1969 to a deficit of $2,512 million in the first 10 months of 1979?

Surely this is not a brilliant performance. We are entitled to ask the Treasurer to give us answers because these are serious questions.

Hon. F. S. Miller: The member hasn’t been here all through the debate and at times his critic has touched upon some of the issues he has mentioned.

I would point out, if the number of people employed per car produced by Peugeot and BMW that you mentioned is correct, it may explain why those cars cost quite a bit more than North American cars. I suspect we have fairly efficient manufacturing plants here and runs that permit economies of scale. Dollar for dollar, I still think North American cars are the best buy on earth, even if some of the members over there happen to be driving imports.

By the way, I’m having a little survey done on the cars driven by each member of the Legislature and we’ll be giving members a rundown on who’s driving what one of these days, very shortly by licence number. I’m going to do it my own open way -- just go out and count the slots, take the MPP licence numbers and see who’s driving Volkswagen Rabbits -- MPP 046 is a Volkswagen Rabbit, I know that.

There’s a Mercedes Benz in the NDP caucus. I spotted one the other day; white, 1975. I think the owner sits in the front row. A few other things like that.

Mr. Peterson: The big question is, what’s Bill Hodgson driving?

[5:15]

Hon. F. S. Miller: That is one of those campaign changes that didn’t quite catch up with the car. A campaign change, for the edification of the member for London Centre, is one of those notices you get by mail telling you to please bring your vehicle in because a part is to be changed. That is called a campaign change. It’s not a political statement, if that’s what he means.

Mr. Peterson: What’s that got to do with changing the shrubbery in front of the building?

Hon. F. S. Miller: I drive a Chrysler product. I got a letter from the company. I, at least, am doing something to support Windsor. In any event, I got a little letter on Saturday morning that said, “Please come in because your car may have an accelerator that sticks.”

One of the basic principles one has to resolve in a capitalistic society is when should the state intervene in the saving of a company? That, I think, is being argued in the United States more than any other issue in terms of the Chrysler matter.

The second thing is if you accept the fact that the state will intervene -- and we in Ontario have accepted that principle; witness the aid to the pulp and paper industry -- one must then determine that the aid will not go down the drain; that, in other words, it will not simply support a company that is past the point where it can be resurrected.

In our case, we took the time to carefully study the industry before the plan was tailored. In the case of Chrysler I suspect no such opportunity had been given to the government because the information wasn’t readily available. I suspect one of the major factors, apart from whether the government of the United States should become involved at all, is whether the company is at the point in its economic state that the money will turn it around.

Once that’s decided I hope we’ll have an answer.

Mr. Ruston: It was interesting to hear the last speaker and the Treasurer replying with regard to the automobile industry as it is now and as it pertains to Windsor. Some people living in Windsor would like to see more diversity in industry other than just automotive. Mind you, there are a number of smaller plants in the city now and many are in research and development.

I was talking to some neighbours of ours last evening about one small industry which now employs 300 people; that increased from 30 over the last six years. It is one of the very highly rated research and development companies in Ontario, which goes to show you what can be done in that area because we do have the manpower and the expertise.

The Treasurer’s comments about Chrysler and the United States, of course, are true. I understand there is supposed to be a vote in the Senate this week on whether they’re going to give aid to Chrysler and whether they’re going to give a $1.5 billion loan guarantee. I think we have to hope that the government of the United States will come to the company’s aid at this time. Of course, many people in the States are fighting that very strongly.

It’s interesting that one of the senators from Indiana who was defeated in the last election was a great defender of the United States on the auto pact; he always said they were getting the short end of the stick. Probably some people would remember his name, Vance Hartke. However, he was defeated in that election even if he did get $310,000 from the United Auto Workers and the AFL-CIO to help him get elected.

Another senator -- or congressman -- from that state was one of those who seconded the motion to put the freeze for the workers in that loan agreement which is going through the Senate.

Doug Fraser, president of the UAW in the United States, has said they really can’t negotiate with prices any more. However, I noticed that in an article in the paper on the weekend, he said, “I learned long ago never to say never.” He said, “I suppose in a way there might be some minor negotiations, or they may furnish some money if it is guaranteed by the government.” I think the UAW have already agreed to give a sizeable amount to Chrysler, providing it is guaranteed by the United States government.

Interestingly, Mr. Chairman, the Treasurer was talking about the imported cars around. I read an article in the newspaper the other day with regard to the number of countries from which we import cars; we do not export to one of them. I believe in being a trading country, but it is not really a two-way street when we import so many cars from Italy, Japan and Russia and do not sell a car to one of those countries. If that is the case, we shouldn’t really be buying their cars. I believe almost 50 per cent of the cars sold in Los Angeles and San Francisco are imported cars from offshore.

As far as auto pact cars are concerned, I classify any car you buy in Canada or made in Canada or the United States as an auto pact car.

The Treasurer mentioned receiving a notice about having his car called in. It must be the same as we have, an Omni. A beautiful car and about 32 miles to the gallon -- up to 40, depending how you drive and what you have. If you want to save fuel, Mr. Chairman, you can cut your fuel consumption in half by going from a large V-8 to one of them. In our family this year we are going to cut our fuel usage down from 2,100 gallons to 1,400 gallons. It can be done, providing the companies have the money for research and the facilities to build these cars.

This is the problem, Mr. Chairman. Regulations the government put in over the past 10 years with regard to environment, air pollution and gas consumption are costing billions of dollars. In General Motors they figure it costs about $300 to increase the gas mileage in each car, whereas in a smaller company like Chrysler it will probably cost about $500. That’s one of their problems,

I suppose another of their problems over the years has been poor management. If a company gets into financial trouble, one says that in some way it was mismanagement. Part of the mismanagement would be the number of cars they built last winter without a market for them. They would have to store them and then sell them the cheapest way they could, with the refund of $400 which I got on the one I bought a few months ago. That was a Chrysler Cordoba.

CBC in Windsor is the only TV station we have in Windsor. Thank goodness we have them in Detroit. The only Canadian station we can get very well is in Windsor, unless we pay a lot of money for a beautiful aerial; then maybe we can haul in CTV or Global from some far-away transmitter.

When Chrysler was having all its problems, there was that beautiful young lady who gives out the news every night and she was saying, “Chrysler’s gas guzzlers are piling up in the fields out there; they can’t sell them.” Two or three nights a week she would be talking about Chrysler and their gas guzzlers. I got rid of my other car and got what she called a gas guzzler and I am getting five miles more to the gallon than I was getting on my other one. I have cut down my consumption 20 per cent or 25 per cent right there.

Mr. Nixon: Send that to the president of Chrysler and he will send you a new car.

Mr. Ruston: They already sent me $400; that’s plenty.

Mr. Treasurer, what they are looking for, of course, is what we have to consider. An interesting concept of all that is the government, with its 21 cents a gallon tax on gasoline, will receive about $140 a year less from our family because of our reduction in gasoline consumption. But we are afraid the new Prime Minister, Mr. Lougheed and his energy minister, Mr. Clark, and his waterboy, Mr. Davis, are going to Godzilla us tomorrow night -- whatever that word is. Anyway, in our area we understand Mr. Lougheed is the new Prime Minister of Canada and the new Minister of Energy is Mr. Clark. They had to have a waterboy so they named him the Premier of Ontario. I am afraid that is what is going to happen tomorrow night.

With the conversion of the automobile industry to smaller cars and smaller engines, there is no doubt we can compete. As you said, cars made in Canada and the United States are of even better quality, or just as good a quality, and as economical to run as the imported ones. Of course, the imported cars have gone up in price because of the devalued dollar, but it hasn’t slowed down sales very much. That is the thing that worries many people in the automobile industry.

Mr. Chairman, all I want to put across to the Treasurer is that with the way industry has had to make changes over the years under a lot of pressure from government, environmentalists and so forth, we have put our automobile industry in a pretty bad way. Of course the biggest company, General Motors, has been able to handle that because of its diversification and the number of models they have. If the sales of one slow down, they sell a great many of another kind and away they go.

If you drive around the General Motors transmission plant in Windsor today, it is unbelievable to see the construction going on all around that two- or three-block area. By the end of 1981 they will probably have more employees in Windsor than the Ford Motor Company because of their extension of the transmission plant. The problem is that doesn’t help us out at the present time. It helps the construction industry a great deal.

The concern we have is whether the industry can afford to put in the necessary machinery and so forth to convert to more economical engines and smaller cars. That is the thing we have a great concern for. We feel all levels of government are going to have to probably help in some way to see they carry out these goals.

Hon. F. S. Miller: I think the honourable member may be wrong in a comment he made. We can let the record be checked, but he said we don’t export to any of the countries that ship vehicles to us. I am told Ford’s Libertyville plant does nothing else but export business and GM is exporting. We can check individual countries.

Mr. Ruston: The countries are named, Mr. Chairman. I am sorry, I don’t have them with me.

Hon. F. S. Miller: There is one thing I should point out. The honourable gentleman ended up saying GM is building a large plant in Windsor right now but it isn’t going to help immediately on the automobile workers’ side. I accept that. The only optimistic point I make is that a good many people are predicting a sales rebound shortly in the automotive sector.

Mr. Laughren: Big cars or little cars?

Hon. F. S. Miller: A lot of people have tried to tie the sales slump to the interest rates. Having been a dealer back in the 1960s I made the observation the other day that interest rates today for the average purchase of a new or used car are lower than they were in the 1960s, when the bank rate was six per cent.

Mr. Worton: Taking into consideration inflation.

Hon. F. S. Miller: No, I’m just taking the nominal rates. If we go back to those days, we recall that the bulk of the cars were financed by the retail credit companies. The rates varied from a low of 14 per cent to a high of about 28 or 30 per cent. There was seldom any car sold in the used car field at less than 18 per cent and most were sold at 24 per cent.

The reason I say that is that when the Bank Act was changed, I think in 1966, the banks were allowed into the field. If one traces the switch to see where the retail credit has gone, you find the banks moved aggressively into that field and brought down the cost of financing. Every car salesman in the world in the old days knew that no one shopped credit, they shopped price of car. Today, thank goodness, through the competition in the finance business, people shop both. I will tell you the cost of credit is more important in your shopping than the price of the car.

It is interesting that even at today’s relatively high bank rates of interest, nominal rates, the retail credit purchaser often is getting a better deal than he got in those days, unless he had a secured loan. Just a little matter of interest because so many people today say, “That’s one of the reasons I can’t afford to buy a car.”

The second thing: When they predict these sales rebounds, they are almost always right. If they are right, one of the big issues then is what size of car is going to rebound? We talked about that earlier. There is a big disagreement in the automotive industry right now as to whether there is going to be a return to the “normal,” the Malibu or Zephyr size or the intermediate compact, whatever you want to call it; the full-sized Chevy, which is now down to the size of a 1978 Chevelle; whether we are going to see a tremendous subcompact surge.

I suspect that the price of oil and the federal tax on fuel, in Canada at least, may have an influence on the kind of car purchased. I am not so convinced it will have any influence on the numbers of cars purchased because I am satisfied that the ratio of 1.8 people per car in Canada right now -- is that right? -- will be reduced. We are pointing to a shorter and shorter life cycle and we are having more and more cars per capita. I sense that the downturn we are in now is cyclical, but as always in the past we will see an upturn before too long. I am not trying to be a pie-in-the-sky optimist, but I believe that is generally the case.

Mr. Laughren: Do you think the deficit is cyclical too?

Hon. F. S. Miller: Well, sure. They are very painful things.

Mr. Laughren: Even though we are not building small cars?

Hon. F. S. Miller: The member was talking about imports and, heavens, I suppose all of us have driven one or more in our lives. But what I worry about with some of the imports is the pricing of them. I think we as parties have some right to ask those who watch the price of imported products to make sure they are being sold at a fair price relative to the home market.

Mr. Laughren: I know what’s coming now.

Hon. F. S. Miller: I’d hate to say that the Lada was selling at a fair price relative to the home market, because the communist countries for a long time have made a point of selling their products to get foreign currency, not to make a profit.

Mr. Laughren: Does the minister know that for a fact?

Hon. F. S. Miller: Yes, I do know it for a fact. I think it was $30,000 versus $4,000, if the member wants the exact figures.

I’d even go and say I think a case might be made -- and I will qualify it by “might” -- on the Volkswagen Rabbit in North America even.

Are you 046? Is that your licence number?

Mr. Deputy Chairman: Is the minister addressing the Chairman?

Hon. F. S. Miller: No. No.

Mr. Deputy Chairman: The Clerk generally doesn’t take part in the debates of the House.

Mr. Nixon: The Chairman, does he drive a Mercedes?

Mr. Ruston: He is laughing, though. He is right.

Hon. F. S. Miller: It’s you, is it?

Mr. Deputy Chairman: If it will save the Clerk any embarrassment, I’ll accept the responsibility.

Hon. F. S. Miller: A red one at that. Oh well, I have uncovered one of my allies.

Mr. Deputy Chairman: No, the minister will find I have a nice little Citation now.

Hon. F. S. Miller: A Citation; that’s fine.

But there has been some argument, for example, that the pricing in North America is inconsistent, that if we look at the price in the US versus the price in Canada, there’s an imbalance. The reason I point these things out is we have gone through the General Agreement on Tariffs and Trade negotiations. One of the basic parts of it all was that products must be sold at fair prices and since the tariff barriers are coming down there must be some protection against dumping, unfair pricing et al.

I think we have to make sure that if these products are being sold unfairly, our home market has a right to be protected and I suspect that I get some support from those of you opposite us. I am talking about a bare car price. One of the things that continues to worry me -- and the member touched upon it -- is about buying foreign products. He said the proportion was 50 per cent in California. Certainly California has a lot of foreign cars. I saw our figures; I can’t recall. It was about 25 per cent of sales are imports, something like that. I always worry about this belief that you have to buy something foreign to get something good.

Mr. Bounsall: Who said that?

Hon. F. S. Miller: No one in this House, but I don’t think a lot of people purchasing products take enough time to recognize where it’s made. I feel that’s one of the responsibilities we as politicians have from time to time. You will hear somebody bitterly complaining about the lack of work and see he’s using foreign products, no matter what they may be, when Canadian products are available.

The last thing the member touched upon was pollution abatement equipment and the effect upon the cost of the car. I don’t want to get into an argument about pollution abatement. The objective is fine. What worries me is that pollution abatement has been a tradeoff against fuel economy. In a fuel-hungry world, I have to wonder which of the social objectives is the more important and how can we trade them off so that the consumer doesn’t get bankrupted in the process?

Mr. Bounsall: I just have one overriding major concern I would like to mention to the minister. I sat here this afternoon and listened to various of my colleagues in the House talk upon the problems in the auto industry. I am very concerned, hearing the minister’s low-key replies, which indicate to me a lack of concern, over getting in place immediately some transitional assistance benefits.

The minister can talk about a rebound coming in the very near future. If that rebound takes place in the employment of auto workers in Ontario or Canada, fair enough; then the transitional assistance benefits will not be in effect. But I just want to very quickly run through with the minister the situation the Windsor auto workers are in.

There are more than 2,300 on indefinite layoff from Ford. Those people will not get back to work until the new engine plant in Windsor is complete. There is now in excess of 2,200 laid off from Chrysler; another 850 are to be put on indefinite layoff as of January 2; the whole of assembly plant 6 is to be shut down on December 17, so in fact the layoff of the 850 starts next Monday. Of those roughly 5,000 workers directly in Chrysler and Ford, 2,000 of them have run out of their supplementary unemployment benefits, of course. They have run out of all unemployment insurance benefits. At the end of this month or early in January, 2,000 of those 5,000 will be on the welfare rolls, essentially awaiting the going back into production of the Ford plant and Chrysler bouncing back.

If there ever was a need for transitional assistance benefits and if there was a meaning to that actual phrase, it’s in Windsor at the moment while they await the coming on stream of that engine plant at Ford and the bounce-back of Chrysler, which I firmly believe will occur. The minister made mention earlier this afternoon of a lack of confidence in Chrysler surviving as a corporation. I don’t believe that at all.

There’s a world of difference between the feeling around Ontario as I have seen it with respect to Chrysler products and the feeling that was around in the last couple of years of Studebaker, particularly because Studebaker in those times was making a product the consumers did not trust. This is not true with Chrysler products. They happen to make a very good product, but a product which in many people’s minds is not the product they wish to buy at this particular moment.

Certainly the press has not been helpful in calling the Cordoba or the Cordoba Mirada a gas guzzler. In fact, they are getting rather excellent mileage. They certainly are getting better mileage on those new vehicles than I am getting on my 1977 Volare wagon. It is an eight-cylinder engine but in a small Volare. The wagon is not very big, but the new cars produced in the assembly plant in Windsor are getting, I would think, five to seven more miles to the gallon than I am getting from my Volare; quite respectable in this day and age in terms of consumption.

So there is a problem with respect to educating the public as to what the gas mileage the cars being assembled in Windsor are getting. I think Chrysler will surmount that. I think they will have enough time to survive if the funds from the US and Canadian governments come through. They will survive and will, under the new management they have, produce a range of cars which will be bought by the public. But until that occurs, there is a very desperate need for the workers in Chrysler to achieve some additional benefits. There is a very definite need for the workers at Ford to have those benefits while they wait around for that engine plant to become operational.

The term “transitional assistance benefit” fits their situation exactly. I am concerned this Treasurer seems so lackadaisical or offhand with respect to pressing the federal government to get those transitional assistance benefits in place. This is what is desperately needed now. Within the next two to three weeks, 2,000 workers will go on the welfare rolls of Windsor, their unemployment insurance having completely run out. It is just the start of those numbers which will accrue over the next year or two until Chrysler regains its situation and Ford gets the new assembly in operation.

What concerns me is your attitude: not appearing to be at all forceful or really all that aware of the need to get these in place now and being very firm with the federal government about that need. If, as you predict, there is a bounce-back in six months’ time, the way the transitional assistance benefits are written will take care of many of those workers desperately in need of the receipt of them now, so that is no argument for not getting into it and not having those transitional assistance benefits in place.

This afternoon I phoned UAW Local 195 in Windsor, which deals with all the auto supplies, the amalgamated local that deals with auto suppliers. They have 1,000 persons on indefinite layoff in the auto feeder plants around Windsor now.

Again, in a few short months many of those will be out of unemployment insurance benefits, quite apart from the very intermittent nature of their work which means two weeks at work, three weeks off, with this sort of pattern occurring right across the auto parts industry. There are another 200 to 300 suspected indefinite layoffs rumoured in the very near future in those plants covered by UAW 195 for those auto parts workers. That transitional assistance benefits program is desperately needed in place now, because the provincial government is going to end up paying 80 per cent of the welfare costs in any event.

Let me say to the minister this is a very serious transitional situation we are going through at Windsor. Last week in Windsor I talked to the manager of the bank I deal with. He indicated he had no more than a handful of applications for mortgages come through his particular branch since June. He has a file so thick he didn’t want to pull it out of his desk to show the number of mortgages in very great danger of being called.

[5:45]

That’s the economic situation in Windsor and all for the sake of having some transitional assistance benefits in place to carry them over to the time when they will be returning to their normal work. It’s very desperate in the Chrysler situation and in the Ford situation.

This government should be doing everything it can, not just for the normal revenues that will benefit this provincial government by having those workers receive some sort of benefit, but for those very great personal problems which will arise in the Windsor area as a few more months go by and no assistance of the kind I speak of is forthcoming. There are numbers of families whose houses are going to be lost because mortgage payments cannot be kept up and numbers of families will be evicted for nonpayment of rent because they do not have the money. They will find themselves wanted for work and back at work in a year and a half to two years’ time.

If the predictions are correct and the financial arrangements are forthcoming from the US and Canadian governments these workers will be employed in a couple of years at the very latest. Even the workers with the least seniority will find work. However, this government refuses to become serious with the federal government in urging it to provide some transitional assistance. It’s very difficult to look ahead with absolute clarity as to what’s going to be achieved but one could predict that this need for transitional assistance is a situation which will be completely cleared up in two years’ time.

These benefits should be in place now and this government should be urging the federal government to take this situation very seriously. There is not much point when one sees the personal tragedy in family after family going through this very lean period, losing their homes only to return to the job in a year and a half or two years’ time and making sufficient money to get back into the housing market but unable to do so because they had to renege on previous mortgages.

That’s going to be the plight of 2,000 or 3,000 home owners in the city of Windsor because of this government not urging the federal government to get into the transitional assistance benefit schemes which have worked in the past and can work now.

Hon. F. S. Miller: Mr. Chairman, I have been intrigued in the last hour and 20 minutes of the debate --

Mr. Laughren: We’re not finished yet, either.

Hon. F. S. Miller: No, I recognize that -- to realize how neatly the ruling of Mr. Speaker has been circumvented because most assuredly what you’ve had this afternoon has been the emergency debate on the topic. I suspect once the speeches were written to show the great flexibility of the members of NDP, they have been delivered.

Mr. Laughren: What is wrong with that? We happen to think it is a very serious problem and you don’t.

Hon. F. S. Miller: I’m not arguing that and I think quite frankly --

Mr. Laughren: Then what are you making those snide comments for?

Hon. F. S. Miller: Are you ever that way?

Mr. Laughren: No.

Mr. Breaugh: He is too short to be snide.

Hon. F. S. Miller: Listen, don’t attack him on that basis. I’ll stand and rise in his defence if I can.

Mortgages were touched upon and the number of mortgages issued. I’d like to point out that if one looks across Ontario one will find a sudden slump in the demand for mortgages and not just in the city of Windsor.

Funnily enough, very recently one of the members of the NDP in questioning me about the housing market in Windsor and the Ford assistance was complaining about the increased price of housing due to the recent increased demand and the fact that the basic price had gone up by -- I think somebody quoted 10 per cent to 15 per cent --

Mr. Laughren: Forty per cent. If a man has an existing mortgage he has to make payments on it.

Hon. F. S. Miller: Forty per cent in the last few months. In other words, when it’s good you complain and when it’s bad you complain. I have a great deal of difficulty understanding which you want.

Mr. Bounsall: Very briefly, on that. Sure. Because of the rumours of the Ford plant coming in and then the announcement, housing prices did jump over a three- or four-month period to 40 per cent greater than they had been. But it then became very clear, after only about six or eight months of that, those jobs would not be in place until late 1980 or early 1981. From what was happening in the other parts of the Ford Motor Company, it was there would be no net gain in total employment in Ford in Windsor and the prices levelled off immediately and started to decrease slowly.

The Chrysler situation has made it such that we’re back to what I would call normal prices for Windsor, prices that would have pertained in the summer of 1978. But that’s nothing to what is going to happen to the prices when there is mortgage default on top of mortgage default over the next two or three months if this government and the federal government don’t get serious about transitional assistance benefits.

If the governments don’t do so I will ask the Treasurer if he is not at all concerned about the numbers -- it isn’t going to be just handfuls; we’re going to be talking in the hundreds, in Windsor -- of mortgage defaults that are going to occur if there are no transitional assistance benefits.

Hon. F. S. Miller: Of course I am, Mr. Chairman.

Mr. Laughren: I wasn’t going to speak in this debate this afternoon, but the Treasurer has provoked me, Perhaps he understands now and other members of this assembly will understand why it is we felt so strongly about having an emergency debate this afternoon in this chamber.

The response by the government to all the issues we raised around the auto pact and the resulting deficits and layoffs had to do with the concern for the future of Ontario. The Treasurer doesn’t seem to understand what is happening.

There were four main reasons why we wanted to have the emergency debate this afternoon and every one of them is reinforced by the Treasurer’s performance this afternoon.

One, 27,000 layoffs across Ontario in November; 13,000 indefinite layoffs currently in effect; two, record high deficits in 1979 pushing us towards the $5 billion deficit which the economists are now predicting; three, we have learned indirectly -- the Treasurer would never be so honest as to admit that, or the Minister of Industry and Tourism -- the government of Ontario has opted out of all the negotiations with Chrysler with the aid the federal government is considering to give them. That means there go the guarantees for Ontario in any aid that is given to them.

Finally, there is the certainty we’re not going to get our share of the new investments, particularly in small cars and small car parts that take place by the Big Three in the years to come.

Those are the reasons why we’re very concerned about it.

The Treasurer doesn’t even seem to understand it’s the investment in the auto industry today that guarantees the jobs tomorrow. His own Ministry of the Treasury in 1978 produced a very good document called Canada’s Share of the North American Automotive Industry: An Ontario Perspective. It was a very good report. If I was working in the Ministry of Treasury and went through all the work of producing a document of this calibre and then saw what the Treasurer did with it, I would no longer be working for that Treasurer.

I don’t know how the Treasurer or the ministers over there think they can employ high-calibre civil servants who have produced good documents with good analyses and then merely sit on them or throw them in the garbage can. That’s basically what the Treasurer has done. I think of the work and the research that must have gone into this document and we have had no evidence at all since then.

Do you know what the government’s response has been when we raise the question of the auto pact? Do you know what the Minister of Industry and Tourism said? He said if we were asking him to go after a fair share, he didn’t know how to define fair share.

Maybe if he had picked up this document and read it he would have found a very neat definition of fair share telling him exactly what the Ontario perspective on fair share should be. When we tell him to get off the sidelines and into the game he says, “We’re very deeply involved in all the negotiations with Chrysler,” and so forth. Then we pick up the Financial Post and we find out Ontario has opted out completely to the federal government because of a strange kind of relationship between the federal minister and somebody in the United States. That’s the kind of response the Ontario government makes. It’s getting very hard to take.

The Minister of Industry and Tourism also stands up and proudly trumpets the investments by GM in Ontario. He’s happy with their investment plans. Is the Treasurer happy with their investment plans?

One day the Minister of Industry and Tourism tells us he’s happy with them and the next day he tells us he is not happy with them. The Treasurer, of course, doesn’t say anything at all, but by every measurement you want to use, we are not getting our fair share under the auto pact. You can use any measurement you want, any benchmark, and we’re not getting it. The Ontario government report says that very clearly.

Mr. Craig, the chief negotiator for the federal government with Chrysler, has put it very succinctly. My colleague from Downsview raised it. He said it’s a branch-plant operation. They don’t care what goes on here. Decisions are not made here; it’s a lot of nonsense. When I see the Treasurer sitting there and giving us these half-baked responses to what I consider to be very serious questions, it makes me very angry.

I would only ask that the Treasurer go back to that 1978 document. It just happened to be a Treasury document. It wasn’t a Ministry of Industry and Tourism document. Maybe we need to return to the days when the Treasurer of Ontario was more involved in what goes on in the manufacturing sector. This Treasurer has abdicated to the Minister of Industry and Tourism. Either that or the Minister of Industry and Tourism has stolen that responsibility from him. It’s one or the other.

We need to go back to the days when the Treasurer, who is supposed to be charting the economic future for this province, had something to do with long-range planning. This Treasurer has completely opted out of that. He’s opted out to the wrong minister, too, I might add.

I would ask the Treasurer to go back to that 1978 document, even if he only reads the summary. Let him read the summary and get it very clearly in his mind that we are not getting our fair share. I would ask the Treasurer simply to go back over that document. It’s not much to ask him to take some new initiative of his own. He’s abdicated all new initiatives to the Ministry of Industry and Tourism. I ask him why he is not involved in some of these things.

On motion by Hon. Mr. F. S. Miller, committee of supply reported progress.

The House recessed at 6 p.m.